Fraud-hit CG Power CEO Neelkant resigns from subsidiaries

Fraud-hit CG Power Chief Executive Officer K N Neelkant has quit from all the subsidiaries of the company as investors mount pressure for his ouster for the alleged irregularities happening under his watch, sources privy to the development said.

Neelkant confirmed resigning from the subsidiaries but said he believed that investors and lenders would not want him to step down from CG Power in the "best interest" of the company.

Late last month, the board of CG Power & Industrial Solutions removed its founder Gautam Thapar as chairman following an investigation unearthing a multi-crore financial fraud in the company.

Sources said investors and lenders want clean-up of the company and so forced Thapar out. They want completely new management to run CG Power, for which they believe Neelkant to go, sources said.

The company's board had on May 10 sent Neelkant on leave pending an investigation into some "suspect, unauthorised and undisclosed" transaction. The investigation found that some assets were provided as collateral and the money from the loans siphoned off by "identified company personnel, both current and past, including certain non-executive directors".

The money was siphoned off through some of the subsidiaries of the company, from which Neelkant has resigned, they said.

Reached for comments, Neelkant said, "Based on analyst calls, the key investors are rather concerned about the operations which have been growing profitably and significantly faster than the market in the last few years, since my assuming the position of MD and CEO of CG Power."
He said the second phase of investigation or forensic audit has commenced and, hence, he continues to recuse himself "as before till the time the same is concluded for the same purpose."