CG Power fraud: Thapar cites board approvals, denies fund misuse charges

CG Power board sacked Thapar after an audit report by Vaish Associates, which itself is based on as many as 23 disclaimers, claimed that Thapar swindled Rs 3,000 crore from CG Power.

Market News : Citing regular board approvals for various inter-corporate loans, former CG Power Industrial Solutions' non-executive chairman Gautam Thapar has refuted allegations of fund misuse amid alleged governance lapses coming under the regulatory scanner, according to documents submitted by him to the government.

In a 36-page submission to the corporate affairs ministry early November, Thapar, who was sacked in a boardroom coup in the wee hours of August 30, has provided documents on various issues, including inter-corporate loans, minutes of board meetings and loans from lenders like Standard Chartered Singapore and Yes Bank.

CG Power board sacked Thapar after an audit report by Vaish Associates, which itself is based on as many as 23 disclaimers, claimed that Thapar swindled Rs 3,000 crore from CG Power.

Markets regulator Sebi banned Thapar and entities associated with him for three years, following which he moved the Securities Appellate Tribunal, which has asked the company to provide relevant documents to him.

The Serious Fraud Investigation Office (SFIO) has also started a probe against CG Power and 15 group entities. The ministry has moved NCLT Mumbai seeking to restate the books of accounts of CG Power from FY16. An order is expected on Monday.

The documents, seen by PTI, show how Standard Chartered Singapore extended a $44-million lifeline to CG Singapore in February 14, 2018. The entire money was then paid to CG International Netherlands through another group entity AIA and Avantha. The same amount was fully transferred back to CG International Netherlands on the very same day.

Later, the company in turn paid back the entire amount to StanC Singapore, thus making the account standard, show the documents.

While a major allegation revolves around funds moving in and out of CG Power and group entities, Thapar has claimed that such a route was taken following suggestions from lenders since CG Power was facing liquidity issues.

Similarly, Aditya Birla Finance and Yes Bank allowed CG Power to get funds between 2016 and 2019 in a similar manner as StanC did in 2018, showed the documents.