The National Company Law Tribunal (NCLT) on Monday said that the books of fraud hit CG Power should not be opened now as a SEBI-commissioned investigation is already underway. The Mumbai-bench of the tribunal observed that the report of Vaish Associates cannot be termed independent as it was commissioned by the company itself and reopening of the company's accounts cannot be ordered on the basis of the report and also as agency appointed by SEBI should be allowed to complete its investigation.
The Ministry of Corporate Affairs (MCA) last month approached the NCLT seeking to reopen the financial statements of CG Power Industrial Solutions for the period raging from financial year 2015-19 on the basis of the company's announcement on the exchange about financial irregularities.
The company in August disclosed the findings of its risk and audit committee (RAC), which revealed that the firm and the group together could have under-reported liabilities to the extent of over Rs 3,600 crore in the financial years 2017 and 2018.
Erstwhile CG Power Chairman Thapar, CFO V.R. Venkatesh among others were removed from the company board in August, over alleged under-reporting and siphoning of money to Thapar's other firms and were eventually barred from the stock markets and Thapar was also summoned by the Ministry of Corporate Affairs. Thapar, however, says that the transactions took place with due approval of the board.
The accused former executives have maintained that the Vaish Report is biased and not independent. The tribunal will next hear the matter on January 9, 2020.
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