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Manpasand Beverages hits lower circuit

Shares slide after top officials held in alleged GST fake invoices fraud

May 28, 2019 10:38 pm | Updated 10:44 pm IST - AHMEDABAD

Shares of Gujarat-based Manpasand Beverages on Tuesday hit the lower circuit of ₹70.40 on the BSE. This follows the arrest of its top officials in connection with an alleged GST fake invoices fraud. On Monday, the scrip dived 20% to close at ₹88 on the BSE.fraud.

According to details, some top officials of the company were taken under judicial custody following search and seizure proceedings carried out at various premises of the company by GST officials last week.

Judicial custody

“Mr. Abhishek Singh, whole time director, Mr. Paresh Thakkar, chief financial officer (CFO) of the company and Mr. Harshvardhan Singh are under judicial custody of GST Authority from 24 May, 2019. The company is contesting these allegations in accordance with the due process of law,” the company said in a statement.

Meanwhile, the company’s independent directors Bharat Vyas and Milind Babar, along with director Dhruv Agrawal and non-executive director Vishal Sood have tendered their resignation from the board after the countrywide raids and search operations conducted by the GST authority.

The company informed the stock exchanges that Mr. Vyas resigned due to “pre-occupation,” while the resignation of others was “mainly due to GST search.”

On Monday, the company also informed the bourses about the cancellation of the board meeting which was scheduled to be held on May 28 “due to unavoidable circumstances and also due to want of quorum during the board meeting.”

The Central Goods and Services Tax (GST) Commissionerate Vadodara-II said in a statement that the company’s MD Abhishek Singh, his brother Harshvardhan Singh and CFO Paresh Thakkar were arrested after a raid on various locations on May 23.

According to the CGST, the investigation unearthed a network of over 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 ₹40 crore and involving a turnover of ₹300 crore approximately,” the statement issued by the CGST said.

The CGST said the ultimate beneficiary of the fraud would be unearthed after a detailed probe.

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