CG Power and Industrial Solutions share price tumbled for the second consecutive day after the board of Gautam Thapar-promoted firm said it would restate accounts after discovering significant accounting irregularities and governance lapses. CG Power share price was stuck in lower circuit of 20% to Rs 11.80 in early trade on BSE. CG Power share price closed 20% lower at Rs 14.75 in trade yesterday.
CG Power and Industrial Solutions share price has been falling for the last two days and lost 35.87% during the period. CG Power and Industrial Solutions share price opened at a loss of 20% today and was stuck in lower circuit in subsequent trade.
CG Power investors have lost Rs 396.25 crore since Tuesday. The market capitalisation of the small cap firm stood at Rs 1,153.21 crore on Monday. On Tuesday, it fell to Rs 924.45 crore. Today, the M-Cap of the small cap stock fell to Rs 756.96 crore on BSE.
CG Power share price saw only sellers and no buyers in early trade. CG Power share price has fallen 80.69% during the last one year and fallen 73.81% since the beginning of this year.
The board suspects significant understatement of the firm's liabilities and advances to related and unrelated parties. In fact, total liabilities of the company and the group may have been potentially understated by approximately Rs 1,053.54 crore and Rs 1,608.17 crore respectively as at March 31, 2018; and by Rs 601.83 crore and Rs 401.83 crore respectively as at April 1, 2017, the firm said after a meeting of Board of Directors as well as Risk and Audit Committee held yesterday.
The firm further said advances to related and unrelated parties of the company and the group may have been potentially understated by Rs 1,990.36 crore and Rs 2,806.63 crore respectively as at March 31, 2018; and by Rs 1,479.34 crore and Rs 1,331.47 crore respectively as at April 1, 2017. The company's net worth was potentially understated due to unauthorised and inappropriate write-offs and charges debited to the profit and loss statement during the year ended March 31, 2018 and April 1, 2017, the filing said.
These transactions might have resulted in misstatement of past financial statements, it added.
Meanwhile, according to a Business Standard report, the ministry of corporate affairs has ordered a probe into the affairs of the company. The probe was ordered after auditors of the firm resigned a few months ago. "The inspection report will be ready soon and appropriate action will be taken," Business Standard cited a senior government official as saying.
Edited by Aseem Thapliyal