Shares of Manpasand Beverages were locked at the lower circuit limit of Rs 48.85 on 3rd June 2019. The plunge experienced was almost 50%. This was after the arrest of top officials of the company due to allegations of GST fraud.
On 24th May 2019, the top management of Manpasand Beverages was taken under judicial custody by the authority of Central Goods and Services Tax (CGST) Commissionerate Vadodara-II under the allegations of GST fraud.
The CGST officials commenced search and seizure proceedings across several establishments of the Manpasand Beverages on 23rd May 2019. The inquiry continued on 24th May 2019 at GST Bhavan office of Vadodara. Post this inquiry, the CGST officials arrested MD Abhishek Singh, his brother Harshvardhan Singh and the CFO Paresh Thakkar of Manpasand Beverages. The investigation brought to light tax evasion of Rs 40 crores which involved a turnover of Rs 300 crores. The CGST officials also revealed a network of more than 30 fake units of Manpasand Beverages. These units are located in various parts of the country. The company used these units for committing fraud by availing illegal credit. The company refused to reveal the amount involved in this matter citing the reason of impact of the case on the company.
Post – investigation:
Post this investigation from CGST Commissionerate, Mr Vishal Sood resigned as the Non- Executive Director of the Company due to the search from CGST agency on 24th May.
This is not the first time that the Manpasand Beverages is under the limelight for its operations. In May 2018, Deloitte Haskins & Sells resigned as the statutory auditor of Manpasand Beverages a few days prior to the declaration of annual results. Reportedly, the auditors left due to lack of information provided by the Manpasand Beverages. The exit of the auditors resulted in the crashing of the company’s shares by 20%.
The fruit juice maker company, Manpasand Beverages, has a market capitalization of Rs 1,007 crores. The company owns brands such as Mangosip, Fruitsup, Jeerasip, ORS, OXY Sip, X-Cite, Siznal, and Aprilla. Prior to the arrest of the top officials, the company’s shares closed down at Rs. 110 on 24th May 2019.