Manpasand Beverages Ltd shares tanked 20% on Monday to hit the lower circuit at Rs 88 after the Vadodra-based company’s top management was arrested by the Goods and Services Tax (GST) department for an alleged fraud.
The fruit juice company owns brands such as MangoSip, Fruits Up, Manpasand ORS and OXY Sip.
The Central Goods and Services Tax (GST) Commissionerate Vadodara-II said in a statement that the company’s managing director Abhishek Singh, his brother Harshvardhan Singh and chief financial officer Paresh Thakkar have been arrested after a raid on 23 May.
The CGST statement said the investigation unearthed a network of more than 30 fake units across the country that were used by Manpasand Beverages to commit fraud by availing illegal credit.
“Multi-locational searches were conducted on various premises of Manpasand Beverages on 23 May. The searches resulted into an unveiling of a huge racket of creating fake units for availing fraudulent credit and committing tax evasion of Rs 40 crore and involving turnover of Rs 300 crore approximately,” the statement said.
CGST Vadodara-II added that the investigation regarding the ultimate beneficiary of the fraud and the web of shell companies is under progress.
Meanwhile, in a clarification to exchanges, Manpasand Beverages said: “The company is contesting these allegations in accordance with the due process of law. Considering the present status of the case, estimated impact on the company and amount involved is not identifiable till the outcome in the matter.”
Manpasand Beverages will also be holding a meeting of the board of directors on Tuesday.
Manpasand Beverages’ statutory auditor Deloitte Haskins and Sells had resigned in May 2018 ahead of the declaration of March quarter financial results that year. Deloitte had said that Manpasand Beverages failed to provide them with “significant information” on financial results for 2017-18. Following this, Religare Broking had also suspended coverage on the stock, citing a lack of clarity on the resignation of its auditors. It also flagged concerns on lack of disclosures provided by the firm with respect to this issue.
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