SEBI Will Look Into Details Gathered On CG Power, Says Chairman Tyagi
The Securities and Exchange Board of India said it has gathered details about alleged financial irregularities at CG Power and Industrial Solutions Ltd. and is looking into the matter.
Shares of the company plunged to touch their lowest trading permissible limit for the second consecutive day after a probe by the board of the Gautam Thapar-promoted CG Power found major governance and financial lapses.
The lapses include advances to related and unrelated parties as well as liabilities of the company and the group potentially being understated by hundreds of crores of rupees.
“We have obtained some details of what is going on with them. We will look into it,” SEBI Chairman Ajay Tyagi said on the matter.
Shares of Yes Bank Ltd. also tumbled nearly 9 percent amid concerns over its exposure to CG Power.
“While working on one of its priority tasks of seeking refinancing of certain facilities and as part of conducting financial analysis in this regard, the Operations Committee was made aware of some unauthorised transactions by certain employees of the company,” CG Power had said in a filing to the stock exchanges on Tuesday.
To a query on whether SEBI would allow mutual funds to enter into inter-creditor agreement proposed by some debt-ridden companies, Tyagi said the issue is being examined.
“We have received a reference from the Association of Mutual Funds in India and we are examining that,” he said.
As part of resolving stressed assets, most of the banks have entered into inter-creditor agreements with debt-laden companies.
Currently, lenders are evaluating resolution plan received from DHFL, which has debt worth over Rs 90,000 crore.
“We are bankers who have lent, there are others who have also lent, like MF, insurers, pension funds. All have to be brought on the same page if we have to have a resolution. Both the banks and the regulators are looking at this issue very closely,” Arijit Basu, a Managing Director at SBI, said.