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The management outlined its plans for “cleaning up” the company and putting in place strong corporate governance and risk management practices, and its strategy for improving and growing operations.
A recent investigation by the company revealed that nine wrongful transactions, allegedly undertaken by the promoter group led by Gautam Thapar, had caused it a loss of around Rs 3,000 crore. The company is doing a deeper investigation under what it calls ‘Phase 2’, even as the Ministry of Corporate Affairs, western division, has referred the case to the Serious Fraud Investigation Office.
“Your company considers any further association with Mr Gautam Thapar and the promoters as prejudicial to the interests of your company and its stakeholders. Corrective actions will follow in the future as necessary,” new chairman Ashish Kumar Guha said in his first communication to the shareholders after taking over.
He said the company was cooperating with all agencies since August 2019 to expedite closure on these issues.
The company said the board of directors was in active discussions with lenders for restructuring the borrowings and infusion of fresh capital. It is evaluating divestment of non-core assets and also reviewing its international business with the aim to make it “a coherent part of business and drive synergies”.
The company has revenue visibility on the back of an order book of over Rs 7,000 crore as on March 31, the management said. The company also said it has designed and developed electric vehicle motors for passenger buses and wanted to tap the opportunity from the government’s push in the sector.
“CG becomes the first Indian motor manufacturer to enter the EV motor category, and plans to expand its presence into other four-wheeler automobiles,” the company said.
Executive director Sudhir Mathur said the “terrible crisis” that CG was in was due to “substantial pilferage of shareholders’ funds” to aid other companies belonging to the promoter’s group.
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