Private lender Yes Bank fell nearly seven per cent during early trade on Tuesday, following revelations of corporate fraud at CG Power and Industrial Solutions. Yes Bank has a significant stake in CG Power and Industrial Solutions.
Yes Bank shares traded 6.91 per cent lower at Rs 71.40 a share at 1.15 p.m. Hit by major corporate governance issues involving unauthorised transactions and understatement of liabilities, Gautam Thapar-led CG Power and Industrial Solutions' shares too plunged nearly 20 per cent on the BSE.
The company's Risk and Audit Committee (RAC) revealed that the firm and the group together could have under-reported liabilities to the extent of over Rs 3,600 crore in FY17 and FY18. The corporate fraud, which went unnoticed for almost three years, has raised questions over regulatory oversight.
In a regulatory filing Mumbai-based CG Power and Industrial Solutions said it was while working on one of its priority tasks of seeking refinancing of certain facilities, that its operations committee was made "aware of some unauthorised transactions by certain employees of the company".
"The Ops Committee was also made aware of a letter received by the company from a particular financing company regarding a certain interest payment failure, which the Ops Committee was unable to trace or ascertain from the financials of the company," the company said.
Further, it informed that the Managing Director had received a request from a bank to replace a cheque the validity of which was about to expire. "The committee could not relate this to any obligations of the company," said the company.