CG Power has been losing for the last 4 days and has fallen 11.26% during this period. Today the stock fell to Rs.11.19, very close to its 5% LC of today at Rs.11.11.
The stock is down after the company stated that the Serious Fraud Investigation Office (SFIO) has sent a letter to the company that the Central Government has ordered an investigation by the SFIO into the affairs of the company and its 15 related/ group companies.
The company state that it is committed to cooperate with SFIO to enable them to complete its investigation in a time bound manner.
Additionally, the Ministry of Corporate Affairs (MCA) has filed a petition before the Mumbai-bench of the National Company Law Tribunal (NCLT) seeking permission to re-open the books of account and recast the financial statements of CG Power and its subsidiary companies for the past five financial years beginning 2014-15.
If one may recollect, in August, the company had stated an investigation undertaken by the Board had found major governance and financial lapses, including some assets being provided as collateral. It has found that money which had come in from the loans had been siphoned off by identified company personnel, both current and past, including certain non-executive directors.