CG Power case: Look out circular issued against ex-chairman Gautam Thapar

The case could be referred to the Serious Fraud Investigation Office (SFIO) if the preliminary inspection report points to a fraud and gaping holes in the books of the firm

The government has issued a look-out circular against Gautam Thapar, the ousted chairman of fraud-hit CG Power and Industrial Solutions, said senior official.

“We are looking at the gaps in the company’s books. The circular has been issued as a pre-emptive measure,” the senior official added. The circular has been issued at the behest of the Ministry of Corporate Affairs (MCA), which is currently inspecting the books of the company. The case could be referred to the Serious Fraud Investigation Office (SFIO) if the preliminary inspection report points to a fraud and gaping holes in the books of the firm.

A month ago, the company was hit by an accounting scandal and the liabilities of the group were found understated by over Rs 1,600 crore for 2017-18. “Funds diverted from CG Power were fraudulently transferred to its promoter company Avantha Holdings and entities related/connected with the company, Avantha International, Acton, Ballarpur International, Mirabelle and Solaris, without knowledge of the company and without any approval from its board,” the report of the risk and audit committee said.

The regional director’s (RD’s) office of the MCA – western region – is conducting the inspection and is likely to submit its report soon. The RD’s office has questioned more than 20 persons in connection with the matter so far. Resignation of the company’s auditor had triggered an MCA inquiry into CG Power and Industrial Solutions..