Snapping the winning streaks for eight straight sessions, the shares of Manpasand Beverages whipped down by 9% in Thursday session. The shares of the company closed down by 7.06% registering at 118.50 on BSE, thanks to the fraud committed by its Managing director. Well, let’s have a look at one more scam that could have made the market go berserk.
The company’s managing director Abhishek Singh and his brother Harshvardhan Singh along with CFO Paresh Thakkar were recently arrested by Central Goods and Services Tax Commissionerate for availing fraudulent credit and evading taxes amounting to Rs 40 crore that involved turnover of Rs 300 crore.
Further, the CGST statement revealed that the investigation has unveiled a network of 30 fake units in different parts of the country that were used to avail illegal credit.
Should Manpasand Beverages Investors Worry?
Recently, the company disclosed a steep increase in the profits amounting to Rs 36.38 crore for the first quarter ending June 30, 2018 as against 35.91 crore in the corresponding quarter of previous fiscal year, and it disclosed its diversification plans that include foraying into new product segments milk-based drinks, fruit-based drinks, glucose drinks and protein-based drinks.
To cater to the growing demands, the company has even finalized its fourth new plant in Khurda, Odisha and has installed a new plant of Rs 180 crore in Varanasi, Uttar Pradesh.
On the face of it, the fundamentals remain attractive but when we look closely it seems to be an illusion because recently the company’s auditor alleged its directors for insufficient financial disclosures and lack of transparency.
Even the SEBI has recently imposed regulatory surveillance framework and it is because of this the company stock has lost 60% of its value in the last one month.
Going by the facts, we can say that the investors should think twice before investing in the stock.