Manpasand Beverages Ltd shares dropped 5% in trade on Wednesday after another auditor, Mehra Goel and Co. Chartered Accountants, resigned amid the ongoing investigation in the GST fraud case.
In a regulatory filing to stock exchanges, Manpasand Beverages said that Mehra Goel and Co. resigned as the company’s statutory auditor due to “recent developments, including action and investigation initiated by the Goods and Sevices Tax authorities in relation to Manpasand Beverages...”
Mehra Goel and Co. is the second auditor to resign from Manpasand Beverages after Deloitte Haskins and Sells quit in May 2018, citing that the company was not sharing “significant information”.
At 1041 am, shares of Manpasand Beverages were locked in a lower circuit of 5%, trading at Rs 38.85 apiece. The stock has lost over 63% since 24 May after top executives of the Vadodara-based company were arrested for an alleged Rs 40-crore fraud involving fake invoicing related to GST.
The Central Goods and Services Tax Commissionerate Vadodara-II had said in May that the company’s managing director Abhishek Singh, his brother Harshvardhan Singh and chief financial officer Paresh Thakkar have been arrested after a raid on 23 May.
The CGST statement said the investigation unearthed a network of more than 30 fake units across the country that were used by Manpasand Beverages to commit fraud by availing illegal credit.
“Multi-locational searches were conducted on various premises of Manpasand Beverages on 23 May. The searches resulted into an unveiling of a huge racket of creating fake units for availing fraudulent credit and committing tax evasion of Rs 40 crore and involving turnover of Rs 300 crore approximately,” the statement added.
Manpasand Beverages is the manufacturer of fruit juices and sells them under the brand names of X-Cite, Mango Sip, Siznal, Aprilla. Interestingly, the company is yet to file its results for the March 2019 quarter.
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