CG Power investors should ask for new directors: InGovern

Ahead of CG Power's annual general meeting (AGM), proxy advisory firm InGovern Research has said that investors of the company should seek appointment of a new set of directors on board.

CG Power has called an annual general meeting of shareholders on December 14 where the resolution for borrowing upto Rs 5,000 crore will be put to vote.

"Investors would have to seek that the entire board be refreshed with a new set of directors," Shriram Subramanian, MD, InGovern told .

Subramanian also asked the shareholders to vote for the increase in borrowings to up to Rs 5,000 crores for meeting the funding needs.

He also said that shareholders should wait until the investigation and forensic audit by BSE-appointed audit firm concludes and its findings are made public.

CG Power, has been under financial stress and the government has also initiated invetigations into the affairs of the company over the alleged siphoning of the company's funds by few former members of its management including its ersthwile Chairman Gautam Thapar and Chief Financial Officer V.R. Venkatesh.

Thapar and the other accused have however said that all the concerned transactions took place with due approval of the board.

On Wednesday, the company informed the exchanges that the investigation by the Serious Fraud Investigation Office (SFIO) is underway.

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.

Thapar, 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.

( With inputs from IANS )