In its earnings statement for the July-September quarter, CG Power on Tuesday said: “The Phase-2 investigation has been initiated by the board and update/report of the ongoing investigation shall be submitted to the board in due course. The investigation is expected to be completed by the fourth quarter of FY 2019-20.”
The firm said it has issued recovery notices to seven entities demanding repayment of Rs 1,314.78 crore owned by them to the company. Besides, its subsidiaries have sent 23 notices to recover Rs 2,095.64 crore.
“Three notices sent by the company (recovery amount Rs 452.12 crore) and nine notices sent on behalf of the subsidiaries (recovery amount Rs 429.85 crore) have been returned undelivered,” it said. “Besides, recovery notices for claims Rs 74.63 crore owed to the company and Rs 395.18 crore owed to certain subsidiaries could not be sent for want of requisite details including communication details.”
CG Power said a total of Rs 3,018.62 crore was receivable from “various promoter affiliate companies and connected parties”.
These include Rs 1,001.38 crore Thapar’s Avantha Holdings Ltd. Another Rs 287.75 crore was due from Blue Garden Estate Pvt Ltd and Rs 175 crore from Acton Global Pvt Ltd – two firms which were classified as “promoter connected party”.
Among parties related to the promoter group, Rs 552.33 crore was due from Ballarpur Graphics Paper Product Ltd, Rs 348.71 crore from Avantha International Assets BV and Rs 378.76 crore from Solaris Industrial Chemicals Ltd, the filing showed.
Blue Garden Estate Pvt Ltd also had Rs 320 crore of pending loan/advance.
The board of CG Power had in August end sacked Thapar as chairman and thereafter forced CEO K N Neelkant to resign.
CG Power reported narrowing of consolidated net loss in July-September to Rs 61.47 crore from Rs 101.83 crore in the same period of the previous year, according to the regulatory filing by the company.
Revenue from operations fell to Rs 1,541.58 crore from Rs 2,109.63 crore in Q2 of previous fiscal year.
The board of troubled power equipment manufacturer said it has withdrawn of its amalgamation plans with its wholly-owned subsidiary CG Power Solutions.
The decision to withdraw was taken in the backdrop of findings of the phase-I investigation report, which had alleged financial fraud by its former chairman Gautam Thapar.
Thapar had previously denied wrongdoing and said no transaction was done without the knowledge of the board.
“Out of the recovery notices sent by the company, responses have been received from two entities (recovery amount Rs 108.85 crores) seeking particulars of the claim made by the company; from one entity (claim amount Rs 685.31 crores) making counter claim of Rs 525.21 crores with interest at 15.70 per cent per annum from April 30, 2019,” CG Power said.
One entity (claim amount Rs 68.50 crores) has stated there is no amount outstanding and for the recovery notices sent on behalf of subsidiaries while four entities (claim amount Rs 322.72 crores) have requested for full particulars/ account statements and bank statements for their perusal, it said.
“One entity (claim amount of Rs 320.91 crores) has stated that it would be entitled to offset the concerned subsidiary’s claim against the monies owed by the company to that entity, and from two entities (claim amount Rs 9.20 crores) have rejected the claim of the concerned subsidiaries.”
“Based on the information available with the company, the Management believes the responses received are untenable and will continue its legal options. The legal counsel appointed by the company is in the process of evaluating appropriate legal actions to be taken in respect of Undelivered Notices and Unsent Notices,” the regulatory filing said.