Just a day after the Rs 609-crore initial public offering (IPO) of P C Jeweller (PCJ) closed for subscription last Wednesday, the homes of key members of the board of directors, the offices and showrooms of the company were searched by the Directorate of Revenue Intelligence (DRI).
The searches were conducted at PCJ’s registered office and corporate office in Delhi. Also, seven of the company’s 30 showrooms, at Delhi, Noida and Gurgaon, were searched for three days by DRI.
The operations were conducted with regard to PCJ’s import of jewellery from Thailand. DRI has alleged the customs duty payment was wrongly calculated by PCJ on the import. While the company has not received any written notice from DRI or any other regulatory authority on this matter, it has paid Rs 8.5 crore ‘in protest’ to the customs commissioner in Delhi, PCJ said in a public notice today and gave out details of the search. The notice was given as a modification to its IPO red herring prospectus.
India signed a Free Trade Agreement (FTA) with Thailand this year, under which jewellery imports attract a mere one per cent tax. Comparatively, jewellery imports from other countries attract a four per cent customs duty.
“There can be no assurance that we will not be subject to further investigation and/or other action by the DRI or any other regulatory authority in this matter. As of the date hereof, we are continuing to conduct normal business operations at our registered office, corporate office, all our showrooms and our manufacturing facilities,” PCJ said in the notice.
The IPO had got bids for 263.2 million shares against the 38.4 million offered, as the issue was subscribed 6.85 times.