Shares of Gautam Thapar-promoted CG Power and Industrial Solutions Ltd dropped further by 20 per cent on Wednesday after being locked in 20 per cent lower circuit in Tuesday's session.
Meanwhile, Yes Bank also continued to decline, shedding over 5 per cent in early trade after losing considerably in the previous session. The reason for the fall is that the bank owns 12.8 per cent stake in the fraud-ridden CG Power.
On Tuesday, CG Power and Industrial Solutions Ltd shares slumped 20 per cent after its Risk and Audit Committee raised red flags on five counts which were prejudicial to the company.
The committee found understated liabilities, related party transactions, unauthorised guarantees, understated net worth and company personnel transactions among other irregularities.
"The total liabilities of company and the group may have been potentially understated by about Rs 1,053.54 crore and Rs 1,608.17 crore, respectively, as on 31 March 2018," CG Power said in its exchange filing.
It said that advances to related and unrelated parties and the Avantha Group may have been potentially understated by Rs 1,990.36 crore and Rs 2,806.63 crore respectively as on March 31 last year.
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An independent legal firm was appointed by the board of directors to probe certain financial irregularities by certain employees of the company which submitted a report to the board. The firm pointed out certain misrepresentation in financial statements of the company and unauthorised financial transactions.
Besides Yes Bank, other major shareholders in CG Power include HDFC Mutual Fund, Aditya Birla Sun Life, Franklin Templeton and Life Insurance Corporation of India.
At 12:30 pm, CG Power was down 20 per cent at Rs 11.80 per share while Yes Bank slipped by 5.12 per cent at Rs 67.60 per share.
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