Manpasand scrips tumble on MD, CFO's arrest, 2nd time in 2 years

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SME Times News Bureau | 27 May, 2019
Manpasand Beverages scrips hit lower circuit on the Bombay stock exchange over MD and CFO's arrest facing allegations of Goods and Services Tax (GST) fraud.

The Manpasand scrips hit the lower circuit limit of 20 per cent on Monday. The trading stopped when it was priced at Rs 88 a stock, Rs 22 or 20 pet cent down from its previous close.

The trading in a particular stock and even an index is halted by the exchanges when it hits a lower or upper circuit breaker.

This is not the first such occasion, the stock had hit a lower 20 per cent circuit even in May 2018 after its auditor Deloitte Haskins and Sells India quit the audit process midway due to transparency issues.

The company on Saturday informed that Vishal Sood, Non-Executive Director of the Company has tendered resignation from the post of Director of the Company with immediate effect -- May 24.

"This resignation is mainly due to Search from GST departmental," the company said in a regulatory filing.

According to a BSE filing by the company, the Commissioner of Central GST and Customs carried out search and seizure proceedings at various premises of the company on May 23 and further inquiry was conducted on May 24 at the GST Bhavan office here.

"Abhishek Singh, Whole Time Director, Paresh Thakkar, Chief Financial Officer of the company and (Singh's brother) Harshvardhan Singh, are under judicial custody of authority from yesterday, i.e., May 24, 2019. The company is contesting these allegations in accordance with the due process of law," the company said in the filing.

"Considering the present status of the case, estimated impact on the company and amount involved is not identifiable till the outcome in the matter."

A CGST statement, released on Friday, stated that searches were conducted on various premises of the company on May 23, following which a racket of creating fake/dummy units for availing fraudulent credit and committing tax evasion of Rs 40 crore involving turnover of approximate Rs 300 crore had surfaced.

The investigations revealed a nationwide network of 30 dummy companies that were used by Manpasand Beverages for claiming illegal credit. The agencies were still ascertaining the exact beneficiaries of such dubious deals.