Manpasand Beverages tanks 20% for second straight day on GST fraud case

Shares of Manpasand Beverages were locked in the lower circuit for the second straight day on Tuesday on the BSE after the stock plunged 20 per cent at Rs 70.40 apiece. The stock has spiraled down after the company’s top management was arrested in a Rs 40 crore Goods and Services Tax (GST) fraud case.

During the past two trading sessions, the leading fruit juice manufacturer's stock has tanked 36 per cent - from Rs 110 - since Friday, as compared to a 0.59 per cent rise in the S&P BSE Sensex. It was trading close to its all-time low level of Rs 58 per share touched on February 6, 2019.

There were pending sell orders for 8.99 million shares representing 8 per cent of total equity of Manpasand Beverages on the BSE and NSE at 11:14 am.

“The Commissioner of Central GST and Customs has carried out search and seizure proceedings at various premises of the company on May 23, 2019, and further inquiry was conducted on May 24, 2019 at GST Bhavan office of Vadodara,” the company said on Saturday in a regulatory filing.

Searches were conducted on various premises of the company 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 turnover of approximate Rs 300 crore had surfaced, news agency IANS reported.

Whole-time director Abhishek Singh, his brother Harshvardhan Singh, and chief financial officer Paresh Thakkar are under judicial custody since May 24, 2019.

On Monday, MBL announced that two independent directors Bharat Vyas and Milind Babar, and director Dhruv Agrawal have resigned. 

"Bharat Vyas has resigned due to pre-occupation and Milind Babar and Dhruv Agrawal mainly due to GST search," the company said in an exchange filing.

Furthermore, the company has cancelled the board meeting schedule to be held on today, May 28, 2019 due to unavoidable circumstances and also due to want of quorum during the meeting. The agenda of the meeting was to consider financial results for quarter and year ended March 2019.

The market price of Manpasand Beverages has tanked nearly 90 per cent from its all-time high level of Rs 512 touched in September 2017. The stock got listed on the bourses in July 2015 with its IPO price (adjusted to 1:1 bonus issue) at Rs 160 per share.