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CG Power shareholders vote en masse todeclassify Gautam Thapar as promoter

Our Bureau Mumbai October 21 | Updated on October 21, 2020

Mathur gets nod for reappointment as director

Shareholders of CG Power have voted to declassify Gautam Thapar as the promoter of the company.

At CG Power's AGM on October 19, held virtually, 99.99 per cent of the shareholders voted for re-classification of the existing promoters and promoter group as public, as per company filings. What this means is that shareholders are seeking a separation agreement with Thapar wherein the promoter group ceases to have all rights and powers associated with holding a promoter status.

Further, in the AGM, 99.99 per cent of shareholders voted for the reappointment of Sudhir Mathur, who is at the helm, as Director. Mathur, who was originally appointed as an independent director on the company board in October 2018 and was subsequently appointed whole-time executive director in May last year, was to retire on rotation.

Alleged fraud

Thapar’s promoter group firms’ shareholding in CG Power was 8,574 shares out of a total of 62.67 crore shares, which translates to 0.002 per cent. These developments come in the backdrop of an alleged fraud in the company when it disclosed that the advances to related and unrelated parties have been potentially understated by ₹1,990.36 crore and ₹2,6.63 crore, respectively.

Thapar was removed by the company board on August 29, 2019, and this was followed by CEO K N Neelkant and CFO V R Venkatesh, along with some Board members resigning.

The CG Power board had last year said that after an investigation, it had found major governance and financial lapses, including some assets being provided as collateral and the money from the loans siphoned off by identified company personnel, both current and past, including certain non-executive directors. Subsequently, a corporate battle between CG Power and its ousted chairman Gautam Thapar ensued. This battle has led to value destruction for minority shareholders, said corporate governance advisory firm InGovern.

Almost all of the promoter shares were pledged to lenders who since then have invoked the pledge to recover their loans. On April 1, 2018, Thapar-led promoter group held 21.54 crore shares, which translated to a 34.38 per cent stake in CG Power, according to annual report data.

In August, Tube Investments of India Ltd, a listed entity which is a part of the Chennai-based Murugappa Group offered to invest ₹700 crore in CG Power for a stake in excess of 50 per cent.

Published on October 21, 2020

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