Yes Bank shares fell more than 7 percent on August 20 following worries over the valuation of stake in Gautam Thapar’s CG Power, which has been hit by allegations of financial irregularities.
The stock lost nearly 11 percent in two straight sessions and more than 80 percent in last one year. It closed at Rs 71.25, down 7.11 percent, on the BSE.
Yes Bank held 12.79 percent stake in CG Power and Industrial Solutions as of June 2019.
Shares of CG Power and Industrial Solutions were locked in 20 percent lower circuit at Rs 14.75 amid alleged financial irregularities and some unauthorised transactions by some employees.
CG Power lost its market capitalisation by Rs 228.76 crore to Rs 924.45 crore on the BSE.
After a marathon meeting, CG Power in a BSE filing on August 20 said, “While working on one of its priority tasks of seeking refinancing of certain facilities and as a part of conducting financial analysis in this regard, the operations committee was made aware of some unauthorised transactions by certain employees of the company.”
The operations committee was also made aware of a letter received by the company from a financing company regarding a certain interest payment failure which the committee was unable to trace or ascertain from the financials of the company, the filing added.
The board further said the managing director on getting a request by a bank to replace a cheque, the validity of which was about to expire, immediately brought it to the notice of the operations committee. The committee and the managing director could not relate this to any obligations of the company, it added.
The board also found that the total liabilities of the company and the group may have been potentially understated.
“The total liabilities of the company and the group may have been potentially understated by approximately Rs 1,053.54 crore and Rs 1,608.17 crore respectively as at 31 March 2018; and by Rs 601.83 crore and Rs 401.83 crore respectively as at 1 April 2017,” the filing added.
“Moreover, advances to related and unrelated parties of the company and the group may have been potentially understated by Rs 1,990.36 crore and Rs 2,806.63 crore respectively as at March 31, 2018; and by Rs 1,479.34 crore and Rs 1,331.47 crore respectively as at April 1, 2017,” it said.
The company’s net worth was potentially understated due to unauthorised and inappropriate write-offs and charges debited to the profit and loss statement during the year ended March 31, 2018 and April 1, 2017, the filing said.
These transactions might have resulted in misstatement of past financial statements, it added.
news Source:- moneycontrol