CG Power & Industrial Solutions Ltd (CG Power) has sacked Gautam Thapar as the chairman of the company after an investigation unearthed a multi-crore scam in the company.

In a regulatory filing to the stock exchanges, CG Power, which provides end-to-end solutions to companies in the power sector, said its board of directors, through a circular resolution, resolved to remove Thapar as the chairman with immediate effect.

The company added that the decision was passed by majority consent. It is learnt that Thapar opposed the resolution, while CEO and managing director K. N. Neelkant abstained from voting .

It may be recalled that the board had on May 10 sent Neelkant on leave, pending an investigation into some “suspect, unauthorised and undisclosed” transactions.

Reports had said the investors and lenders of the company had wanted the removal of Thapar after a report submitted by an independent law firm said there were major governance and financial lapses.

“In cognisance of the current situation being faced by the company and the recent developments, including disclosures dated August 19, 2019, made by the company, the board of directors through a circular resolution dated August 29, 2019, passed by majority consent, have resolved to remove Gautam Thapar as the chairman of the board with immediate effect,” the company said in the communication to the stock exchanges.

It added that the decision “has been taken in the interests of the company and its stakeholders in the discharge of the fiduciary responsibilities of the board”.

Shares of the company settled nearly five per cent higher at Rs 9.95 on the BSE.

Since the beginning of this calendar year, CG Power’s shares have lost nearly 80 per cent of their value.

Last week, CG Power had disclosed that the report given by the law firm had cited lapses, that included under-stating of liabilities of the company, advances to various parties which were not adequately reported and providing certain assets without any collateral or authority, apart from unauthorised and inappropriate write-offs.

According to the shareholding data with the stock exchanges as on June 30, the promoters held 8,574 shares of the total 62,67,46,142 shares as lenders over the past years had invoked pledges Thapar had created to borrow money. Yes Bank Ltd, which holds around 13 per cent at present, was the last one to invoke the pledge in May.