Polycab share price tanks on reports of over ₹200-crore tax evasion, companies denies allegations

Wire and cable manufacturer Polycab has been accused of tax evasion, with the Income Tax Department identifying ₹200 crore in undisclosed income. However, Polycab has vehemently denied any wrongdoing, asserting they haven't received any official communication from the department regarding the alleged evasion, according to a report by CNBC-TV18.

Polycab share price was trading in the red soon after the news came in. The stock was down 7.33 per cent at ₹4952.95, at BSE, on January 9, 2023, at 13:02 pm.

According to the report, the Income Tax Department conducted searches at Polycab's premises recently, uncovering discrepancies in financial records. The sources further claimed that the department intends to issue a notice to the company soon, demanding payment of the alleged evaded taxes and applicable penalties.

The Income Tax (I-T) Department has identified transactions worth ₹250-300 crore recorded in the promoter accounts. The department asserts that it has accumulated evidence from the company's accounts covering the last 5-6 years. SuBSEquently, the I-T Department has requested an explanation from the promoters. In response, Polycab, speaking to CNBC-TV18, refutes any reports of tax evasion and mentions that they have not received any communication from the I-T Department regarding the outcome of the search.

Livemint earlier reported that residences and offices of top management associated with the cables and wire manufacturer were also subject to raids. The specific reasons behind the Income Tax Department's searches and the nature of the investigation remain unclear at this point. Bombay Stock Exchange has also sought clarification from the firm regarding these raids.

Despite this setback, the stock has seen remarkable growth, surging by 109 percent over the past year and 113 percent in 2023. Over a three-year period, the shares of this wire and cable maker had delivered substantial returns, showcasing a growth of 449 percent.