MCA summons Gautam Thapar, auditor and other key personnel of CG Power amid fraud probe

The Ministry of Corporate Affairs (MCA) has summoned a number of people associated with CG Power and Industrial Solutions, including its former chairman Gautam Thapar who was sacked last week.

Sources told Moneycontrol that besides Thapar, the company's chief financial officer, the company secretary, other key management personnel and the auditor, KK Mankeshwar & Co, have been called for questioning.

The MCA, which conducted a physical inspection of the CG Power headquarters on August 30, has begun a preliminary inquiry into the company last year after auditors abruptly resigned and found discrepancies in the account books.

Moneycontrol was first to report that the MCA had begun inspection of 42 companies, including CG Power.

The company’s independent directors ordered an investigation, the report for which was submitted on August 6.

As per a report filed with the exchange, "The 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."

"Moreover, 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 on March 31, 2018; and by Rs 1,479.34 crore and Rs 1,331.47 crore respectively, as at April 1, 2017," it added.

The company's net worth was potentially understated due to unauthorised and inappropriate write-offs and charges debited to the Profit & Loss statement during the years ended March 31, 2018, and April 1, 2017.

The ministry is looking into the past three years’ account books in this case.

On the other hand, the company has already ordered a forensic audit and the Securities and Exchange Board of India (SEBI) has also started a preliminary enquiry in the case.