Fruit juice maker Manpasand Beverages Ltd’s managing director and chief financial officer have been taken into judicial custody for alleged fraud related to Goods and Services Tax (GST).
The development has led to a slump in stock prices of the company, with the shares of the SAIF Partners-backed firm hitting the 20% lower circuit after they fell to Rs 88 apiece on BSE on Monday.
The stock had touched a peak in January 2018 after tripling over the initial public offering (IPO) price of Rs 320 apiece three years ago.
Gujarat-based Manpasand Beverages' managing director Abhishek Singh and chief financial officer Paresh Thakkar were ordered into custody on 24 May. Raids on the firm’s several premises and its GST Bhavan office of Vadodara were carried out by the Commissioner of Central GST and Customs on 23 and 24 May, the company said in a stock-market disclosure.
The firm said that it is contesting the allegations in accordance with the due process of law.
The company's performance on the bourses was majorly impacted last year after Deloitte Haskins and Sells LLP resigned as auditor in May 2018.
Deloitte had said in its resignation letter that it was resigning because Manpasand had not provided it with “significant information”, which it had requested several times for the purposes of auditing the financial results and that it would not be able to audit the company’s books.
The auditing firm had also pointed out that there had been no progress with respect to the “pending information, evidence and explanations” despite several reminders.
Manpasand denied any such inaction on its part.
