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Why CG Power and Industrial Solutions shares fell 5% today

Shares of CG Power declined as much as 4.96 per cent to close at Rs 11.11 after the Serious Fraud Investigation Office (SFIO) started probe into the alleged irregularities at the firm and its group companies

twitter-logoBusinessToday.In | December 11, 2019 | Updated 18:52 IST
Why CG Power and Industrial Solutions shares fell 5% today
CG Power and Industrial Solutions shares settled 4.7 per cent lower at Rs 11.15 apiece on the NSE

Share price of CG Power and Industrial Solutions fell nearly 5 per cent on the Bombay Stock Exchange (BSE) on Wednesday after the Serious Fraud Investigation Office (SFIO) started probe into the alleged irregularities at the firm and its group companies.

Weighed down the development, shares of CG Power declined as much as 4.96 per cent to touch an intraday low of Rs 11.11 after opening lower at Rs 11.62 against previous closing price of Rs 11.69 on the BSE. Finally, the stock ended trade at day's low of Rs 11.11 apiece.

In a similar fashion, CG Power and Industrial Solutions shares settled 4.7 per cent lower at Rs 11.15 apiece on the National Stock Exchange. The shares touched a day's high and low of Rs 11.80 and Rs 11.15, respectively.

CG Power and Industrial Solutions, in an exchange filing, said that it has received a letter from the Office of the Joint Director (Investigation), SFIO, Ministry of Corporate Affairs, Government of India. The letter stated that the SFIO has started probe into the affairs of the firm and its 15 group companies.

Also Read: Former CG Power Chairman Gautam Thapar takes legal action against board

The company, however, said that the 15 group companies have not been specifically identified in the letter.

"The central government, in terms of the powers vested under Section 212 of the Companies Act, 2013, has ordered an investigation by the Serious Fraud Investigation Office (SFIO) into the affairs of CG Power and Industrial Solutions Limited and its 15 related/ group companies (not having been specifically identified in the said letter)," CG Power said in a filing to the BSE.

Also Read: CG Power fraud: SEBI bars ex-chairman Gautam Thapar, 3 others from markets

The company is committed to cooperate with SFIO to enable them to complete its investigation in a time bound manner, it said in the exchange filing.

Last month, the government had ordered a probe by the SFIO into the matter after the Ministry of Corporate Affairs (MCA) allegedly found certain instances of alleged 'related party' transactions and 'suspected funds diversion' in the company.

Earlier in September, market regulator Securities and Exchange Board of India (Sebi) barred Gautam Thapar, the former chairman of CG Power and Industrial Solutions, as well as the company's Chief Financial Officer V.R. Venkatesh and two former directors from the securities market. They were accused of siphoning funds from the company after a multi-crore financial fraud unearthed during a board-instituted investigation.

Edited by Chitranjan Kumar

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