Manpasand Beverages Limited (MBL) Managing Director Abhishek Singh and two others were arrested on charges of GST fraud worth Rs 40 crore by investigating officials of Central Goods and Services Tax (CGST) Commissionerate Vadodara-II. The trio was sent to judicial custody after they were produced before a court on Friday.
Multi-locational searches were conducted on various premises of MBL 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 a turnover of approximately Rs 300 crore had surfaced, a statement released by the CGST Commissionerate said.
Harshvardhan Singh, brother of Abhishek Singh, and company’s Chief Financial Officer Paresh Thakkar were among the two others arrested after the detailed investigation.
The investigation disclosed a network of over 30 fake or bogus units, located in various parts of the country, which were used for committing fraud by availing illegal credit. The statement further read that the probe relating to the ultimate beneficiary of the fraud and web of shell companies is under progress.
A meeting of the company s Board of Directors is scheduled on May 28 to consider and approve its Audited Financial Results along with an audited report for the fourth quarter and year ended March 31, 2019.
The MBL has a market capitalization of Rs 1,200 crore and reported total standalone income of Rs 985 crore for the year 2017-18, with a net profit of about Rs 100 crore.
Notably, the company, last year had come under a scanner when its auditors Deloitte Haskins & Sells India had made a sudden exit. Following this development, MBL stock prices lost ground, eroding crores in market value for the company s investors. The stock prices tumbled from its 52-week peak of Rs 458.75 on May 25, 2018 to a low of Rs 52 in February 6, 2019.