Shares of India's major private sector lender Yes Bank extended decline on Thursday, even as investors were worried about the valuation of fraud-hit CG Power in which the bank holds more than 12% stake.
Shares of India’s major private sector lender Yes Bank extended decline on Thursday, even as investors were worried about the valuation of fraud-hit CG Power in which the bank holds more than 12% stake. Yes Bank shares plunged more than 8.1% to hit the day’s low at Rs 60.10. The recent plunge in Yes Bank shares comes after Gautam Thapar-led CG Power said on Tuesday that it found some unrelated suspicious transactions while going through normal financing assessment. “The total liabilities of company and the group may have been potentially understated by about Rs 1,053.54 crore and Rs 1,608.17 crore, respectively, as on 31 March 2018,” CG Power said in its exchange filing. As at the end of June 2019, Yes Bank had a 12.8% stake in CG Power.
Notably, CG Power shares plunged to a fresh 52-week low of Rs 10.65 on the BSE. On Tuesday, CG Power and Industrial Solutions shares plunged 20% and were locked in the lower circuit after its Risk and Audit Committee raised concerns on five counts which were prejudicial to the firm. In the statement to the exchanges, CG Power informed that an independent legal firm was appointed by the board of directors to probe certain financial irregularities by certain employees of the company which submitted a report to the board.
Among other irregularities, CG Power noted that certain assets of the firm were purportedly provided as collateral without due authority; and the Company was made a co-borrower and/or guarantor for enabling ostensibly unrelated third parties to obtain loans without due authorisation. “The moneys so obtained were immediately and without due authorisation routed out of the Company, either by itself or from its subsidiaries or ostensibly unrelated parties to certain related parties,” CG Power said.