Based on specific information from sources three top management officials of Vadodara-based Manpasand Beverages Ltd arrested by the Goods and Services Tax (GST) department for committing fraud worth Rs 41 crore.
Several documents recovered during the simultaneous searches conducted at management staff’s residential and business premises of MBL on Friday night.
The firm’s managing director, Abhishek Singh, his brother Harshvardhan Singh and chief financial officer Paresh Thakkar arrested by Central GST (CGST) and Customs, Vadodara II after conducting a detailed investigation.
A CGST release said that it carried out multi-locational searches on various premises of MBL on May 23.
“The searches unearthed a huge racket of creating fake/dummy units for availing fraudulent credit and committing tax evasion of Rs 40 crores and involving turnover of Rs 300 crore,” the release stated.
“M/s Manpasand Beverages Ltd is a listed company on BSE and NSE with a market capitalization of Rs 1,200 crores.
Continuing investigation has unearthed a network of more than 32 fake units located, committing fraud by availing illegal credit.
Investigation was regarding ultimate beneficiary of the fraud and web of shell companies which is under progress,” said a CGST official.
This is the second time within a year that this beverage firm has found itself embroiled in a controversy. In May last year, the firm’s auditors — Deloitte Haskins and Sells — had resigned. MBL in its statement said, “It is unfortunate that we has to part ways with our long-term associate. Everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation. This is just a minor hiccup and doesn’t represent any long term business impact.”
The company’s stock prices had plummeted following the controversy. On Friday, MBL stock price went up by Rs 5.10 to close at Rs 110. Last year in January, the company’s stock price hovered at Rs 486 a piece.