INSUBCONTINENT EXCLUSIVE:
Mumbai: CG Power - Solutions, which has ousted its promoters following allegations of financial irregularities, has sought regulatory waiver
on a market-access clause to raise much-needed funds, two industry executives aware of the plans told ET
capital markets.
The company, which badly needs funds since bankers were reluctant to give fresh loans, has sought an exemption on tapping
the markets from the Sebi, which barred former chairman and promoter Gautam Thapar and other ex-directors from accessing D-Street after the
familiar with the development
banker, the Kotak group, is handling the fund-raising proposal
ET reported on November 6 that the troubled company aims to raise around Rs 800 crore through an issue of equity or quasi-equity instruments
with losses and huge debt, and is in the midst of cleaning up its management and internal processes after an alleged fraud, which will now
be probed by the Serious Fraud Investigation Office.
The company told the exchanges last week that it is in need of both long-term capital
and working capital and is in the process of identifying potential sources of capital and also seeking external advice on mode and sources
of fund raising.
The company has also initiated the process to remove the Thapar-led Avantha Holdings, which only holds around 8,500 shares,
Rules only allow the promoter to voluntarily seek re-classification as a nonpromoter
CG Power has also asked Sebi to remove the barred individual from being the promoter of company.
Until then, Thapar and Avantha Holdings
public or rights issue if any of its promoters or directors is debarred from accessing the capital market
The rationale behind this provision is to ensure that any such promoter or director doesn't access the capital market indirectly through a
has the general powers to relax strict enforcement of any provision of the ICDR Regulations, I have not come across any case where Sebi
view on the matter, another person familiar with the development told ET.
SFIO will probe the affairs of CG Power after a regional head of
the ministry concerned escalated the matter to the Centre in a report citing instances of alleged relatedparty transactions, suspected fund
diversions and likely breaches that needed a more detailed scrutiny.
In April, an operations committee formed by CG Power's board was
informed of some irregular financial transactions that were executed by the top brass without following due processes and board approvals
Later, the company appointed law firm Vaish Associates, which found that nine likely diversions were made, leading to a Rs 3,000-crore