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NCLT to consider only govt. probe on CG Power

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Tribunal posts hearing to January 23

The National Company Law Tribunal (NCLT), which is hearing a matter related to restatement of accounts of CG Power, has said that only a probe by a government body would be considered by the tribunal while deciding on the matter that stems from alleged funds siphoning by the company’s former chairman Gautam Thapar.

This assumes significance since the allegations against Mr. Thapar and a few senior officials of the company — who were barred from accessing the securities market by the Securities and Exchange Board of India in September 2019 — are based on the report prepared by law firm Vaish Associates that was mandated by the company and hence does not qualify as “independent”.

Only a probe by the government or any government body can be considered, the Mumbai NCLT bench said on Thursday, while posting the matter for January 23.

Incidentally, SEBI passed an interim order against Mr. Thapar in September 2019 based on the Vaish report while barring the former chairman, along with a few other senior officials of the company, from accessing the securities market.

The capital markets regulator, however, has also ordered a forensic audit — which will qualify as independent — to verify allegations of manipulation and misrepresentation in the books of accounts of the company.

Interestingly, the appeal at the NCLT for restatement of accounts has been filed by the government even though the dispute is between a listed entity and its former chairman and senior officials.

“Tendency of government departments getting into a private dispute between two parties needs to be relooked at,” said Sumit Agrawal, Founder, Regstreet Law Advisors.

“Government departments should rather assess before getting into a matter so that they are not used by private parties to settle personal scores or vested interests,” added Mr. Agrawal, who earlier worked with the legal department of SEBI.