The Securities and Exchange Board of India (SEBI) has barred Gautam Thapar, who was sacked as the chairman of fraud-hit CG Power & Industrial Solutions Ltd last month, and three other executives from accessing the securities markets.
Thapar, VR Venkatesh, Madhav Acharya and B Hariharan are also prohibited from buying, selling or otherwise dealing in securities in any manner, either directly or indirectly, till further orders, SEBI said in an interim order. Venkatesh was ousted as CG Power's chief financial officer after the fraud came to light while Acharya and Hariharan are former directors.
The capital markets regulator said that it had, on its own, taken note of news articles last month about the suspected ‘fraud’ at CG Power.
CG Power came under the radar last month after it said it had detected unauthorised transactions and financial irregularities by some employees. Soon after, the company’s board sacked Thapar as the chairman.
The regulator said that a preliminary investigation report submitted by CG Power and the company's audit report indicate a "serious misstatement of accounts and diversion of funds" from the electrical equipment maker.
In its order, SEBI also directed CG Power to take "all necessary steps" to recover the amounts due to the company and take necessary action, including legal actions, to safeguard the interest of the company's investors.
It also said that Thapar, Venkatesh, Acharya, Hariharan as well as promoter group firm Avantha Holdings Ltd and related companies Acton Global Pvt. Ltd and Solaris Industrial Chemicals Ltd appear to have violated several rules and regulations. SEBI restrained Avantha Holdings, Acton Global and Solaris Industrial from selling their assets or divert funds till further orders.
Besides, the regulator said that BSE will appoint an independent auditor to conduct a detailed forensic audit of the books of accounts of CG Power from 2015-16 onwards till date.
The auditor will verify manipulation of the books of accounts, misrepresentation of financials or business operations and wrongful diversion of company funds.The auditor will submit a report to SEBI within six months.