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Why Yes Bank plunged 12% after financial fraud emerged at CG Power
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Shares of Yes Bank fell 5 percent, hitting its 52-week low of Rs 67.55 per share on Wednesday, extending Tuesday’s losses amid concerns over its exposure to CG Power, which has been hit by alleged financial irregularities and unauthorised transactions. The stock has fallen nearly 12 percent since yesterday after the allegations against CG Power …
Continue reading “Why Yes Bank plunged 12% after financial fraud emerged at CG Power”
Shares of Yes Bank fell 5 percent, hitting its 52-week low of Rs 67.55 per share on Wednesday, extending Tuesday’s losses amid concerns over its exposure to CG Power, which has been hit by alleged financial irregularities and unauthorised transactions. The stock has fallen nearly 12 percent since yesterday after the allegations against CG Power surfaced.
Yes Bank has 12.79 percent stake in CG Power. In May, the private sector lender acquired a stake in the company on the invocation of pledged shares of its promoter.
“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,” said CG Power in a BSE filing.
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 1053.54 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.
CG Power said that certain assets of the company 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.
At 9:59 AM, the stock was trading 2.5 percent lower at Rs 69.45 per share on the BSE as compared to 0.03 percent (10 points) rise in Sensex at 37,338. Meanwhile, CG Power hit its lower circuit, down 20 percent for the second straight session.
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