On Monday, the NCLT bench turned down the corporate ministry’s plea to recast the books of fraud-hit CG Power. (Mint )
On Monday, the NCLT bench turned down the corporate ministry’s plea to recast the books of fraud-hit CG Power. (Mint )

Some institutional shareholders vote against adopting CG Power’s FY19 audited ac

  • The resolution, however, passed with 69.96% of all categories of shareholders approving the accounts
  • The shareholders, however, overwhelmingly passed resolutions approving the reappointment of Sudhir Mathur and Narayan K. Seshadri to the board

MUMBAI : More than 32% of the institutional shareholders of CG Power and Industrial Solutions Ltd voted against the adoption of the FY19 audited financial statement of the company, amid an ongoing forensic audit ordered by the Securities and Exchange Board of India (Sebi), the findings of which are yet to be disclosed.

The shareholding of CG Power is evenly split between institutional shareholders (with 305.98 million shares) and non-institutional public shareholders (320.07 million shares). According to details of the voting pattern filed with stock exchanges, of the institutional shareholders, 32.03% voted against the resolution to adopt the accounts. However, the resolution passed with 69.96% of all categories of shareholders approving the accounts.

Institutional investors in CG Power, include HDFC Mutual Fund, Aditya Birla Sun Life Mutual Fund, IDFC Sterling Value Fund, and Franklin Templeton Mutual Fund, as well as alternative investment funds such as KKR India, corporate investors such as Bharti Holdings, and foreign portfolio investors such as Vanguard Total International and Dimensional Emerging Markets Value Fund.

The shareholders, however, overwhelmingly passed resolutions approving the reappointment of Sudhir Mathur and Narayan K. Seshadri to the board.

In August, the board of CG Power sacked its chairman Gautam Thapar after an audit report by Vaish Associates claimed that he had misappropriated 3,000 crore from the company. The veracity of this report has been challenged by Thapar and the matter is currently in the National Company Law Tribunal (NCLT).

On Monday, at the Mumbai bench of the NCLT, in the case of Union of India, ministry of corporate affairs (MCA) versus CG Power and Industrial Solutions, the court turned down the MCA’s plea to recast the books of fraud-hit CG Power, as a Sebi-commissioned investigation is already underway. The NCLT observed that the Vaish audit report could not be deemed “independent". The court also refused to intervene in a fight between two groups vying for control of the company. The next hearing has been scheduled for 9 January.

On 20 August, the CG Power board had said in an exchange filing that an investigation conducted by it had found that the company’s and the group’s liabilities were potentially understated by hundreds of crores of rupees. The board also said that advances to related and unrelated parties, too, were potentially understated significantly.


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