Top officials of Manpasand Beverages Ltd. were arrested on Friday by the goods and services tax department for an alleged Rs 40-crore fake invoice scam.
The Central GST and Customs office arrested Managing Director Abhishek Singh, his brother Harshvardhan Singh and the company’s Chief Financial Officer Paresh Thakkar after conducting an investigation, according the agency’s press release. Officials had conducted searches across various premises of the Vadodara-based beverage maker on Thursday.
“The searches unearthed a huge racket of creating fake/dummy units for availing fraudulent credit and committing tax evasion of Rs 40 crore and involving turnover of Rs 300 crore,” a Central GST and Customs press release said.
Moreover, the release said, the investigation has also revealed the presence of 30 such fake units located in various parts of the country that were used in availing illegal credit. “Further investigations to unearth more shell companies is under progress.” it added.
While Manpasand is yet to respond to BloombergQuint’s email query, it said in an exchange notification, it’s considering the present status of the case estimated impact on the company and amount of involved is not identifiable till the outcome in the matter.
The Mango Sip brand owner’s stock has lost nearly 75 percent of its market value in the last twelve months. In May last year, Deloitte Haskins & Sells resigned as the company’s auditor, saying it wasn’t provided with “significant information” that it had requested, forcing Manpasand to delay annoucing its financial results. That followed separate investigations by the market regulator and the Ministry of Corporate Affairs into alleged non-disclosures and possible accounting lapses.
Most analysts that were covering the stock have suspended coverage or have an under review status on the scrip. According to Bloomberg data, it has one ‘sell’ rating by Kotak Securities with target price of Rs 132 apiece.