A week after its board-instituted investigation unearthed a multi-crore financial fraud, CG Power & Industrial Solutions on Thursday removed its founder Gautam Thapar as chairman of the company, prompting the tycoon to break his silence to say that there was neither any fraud nor any misappropriation of funds.
The board of the fraud-hit firm through a circular resolution approved by a majority of the members removed Thapar as the chairman, the company said in a regulatory filing.
Thapar opposed the resolution, while CEO and Managing Director K N Neelkant, whose continuance has been questioned by investors, abstained from voting on the resolution.
The board is likely to meet on Friday to elect a new chairman, sources privy to the development said. In all likelihood, one of the independent directors will be appointed as the non-executive chairman.
Thapar, who had not commented since the company disclosed financial irregularities on August 20 after a marathon board meeting on the previous day, in a statement said: "No promoter or promoter entity has derived any undue benefit. There is simply no fraud".
"The reports following the Board meeting of August 19, 2019 are disheartening. Indeed, I would say that the reports do not reflect facts," he said. "In the interests of all stakeholders, including banks and financial institutions, I must say that no funds lent by banks nor any funds of CG have been misappropriated. The money has been applied with due Board approval. All inter-corporate transactions have been fully authorised by the Board."
Earlier in the day, the company in a regulatory filing said that: "In cognizance of the current situation being faced by the company and the recent developments, including disclosures dated August 19, 2019 made by the company, the Board of Directors through a circular resolution dated August 29, 2019, passed by majority consent, have resolved to remove Mr Gautam Thapar as the Chairman of the Board with immediate effect."