CG Power fraud: Ex-CFO says Nashik property not sold yet

Refuting allegations of dubious transactions in CG Power regarding its properties in Nashik and Mumbai, V.R. Venkatesh, the former CFO who is among the accused and was removed from the board post the allegations surfaced, has said that the property in Nashik has not been sold.

He also said that transaction of the Kanjurmarg property in Mumbai was not completed yet.

In its investor presentation in August, CG Power had listed several alleged discrepancies or fraudulent transactions including two instances of sale of company properties in Nashik and Kanjurmarg.

A total of Rs 200 crore was received by the sale of land and building in Nashik to Blue Garden Estates Pvt Ltd (BGEPL) and Rs 145 crore was advanced to Avantha Holding Ltd and the promoter of the company and Rs 53 crore went to Acton Global Private Ltd (AGOL), a subsidiary of BGEPL.

The company further said that both BGEPL and AGPL shares were owned by certain employees of the company who had not declared their ownership.

"It was noted that the above two advances of Rs 198 crores were inappropriately netted off against the payable to BGEPL and both the asset and liability were not disclosed in the financial statement of the company for the year ended March 31, 2017," CG Power said in its investor presentation in August.

Similarly, the company said that no disclosure had been made in the financial year 2016-17 statement about the sale of a plot to Kanjurmag, Mumbai to Evie Real Estate Pvt Ltd.

Official sources said Venkatesh in his letter to SEBI and the Ministry of Corporate Affairs (MCA) said to his knowledge that there "has been no sale of Nashik property and that the sale of the Kanjurmarg property of the compnay is yet to be consummated".

He noted that during October 2017 to December 12, 2017, he was in Belgium on the rolls of CG Holdings Belgium NV. He claimed in the letter seen by , that he was not even a direcor of BGEPL or AGPL in May-August 2016 when the funds were alleged to have been transferred.

He observed that, to his understanding and as indicated to him by the erstwhile CEO K.N. Neelkant, the transactions involving Nashik and Kanjurmarg properties were planned and structured by a lender, Aditya Birla Finance Ltd.The ousted CFO further said that during his questioning by Vaish Associates, he had said that the transactions had taken place on the behest of the lenders.

In a scathing rebuttal to the Vaish report which suggested a fraud by former CG Power and Industrial Solutions executives, including its erstwhile Chairman Gautam Thapar, Venkatesh, said that the report was "biased and concocted" and did not reflect several proceedings of the investigation.

As per official sources, in a detailed submission to the Securities and Exchange Board of India (Sebi) and the Ministry of Corporate Affairs (MCA), Venkatesh has claimed that the report by law firm Vaish Associates dated August 5, 2019, was "already made even before" his statement was slated to be taken on July 30.

Further, replying on the allegation of unauthorised signed cheques in favour of Yes Bank in pursuance of a comfort letter which allegedly came to the CG Power board's knowledge in April 2019, Venkatesh said that the concerned comfort letter was dated November 4, 2015 before he had joined CG Power as the CFO.

He further said that there was no reason to believe that the letter was not signed duly and properly at the relevant time. He observed that he used to sign cheques to Yes Bank as a joint authorised signatory, in full knowledge of CEO Neelkant.

The former executive said that CG Power and AHL (Avantha Holdings) were part of the same group, and both entities were funded by Yes Bank.

( With inputs from IANS )