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Business News/ Markets / Stock Markets/  Alkem Labs share price plunges over 14% on 1000 crore tax fraud allegations

Alkem Labs share price plunges over 14% on ₹1000 crore tax fraud allegations

Alkem Laboratories share price drops by 14% after reports of ₹1000 crore tax fraud by income tax department.

Alkem Labs stock drops 7% after ₹1000 crore tax fraud allegations.Premium
Alkem Labs stock drops 7% after 1000 crore tax fraud allegations.

Alkem Laboratories share price slumped over 14% following media reports claiming that income tax department has found widespread tax fraud of 1000 crores. Alkem Lab share price opened at an intraday high of 5,421.65 apiece on BSE

India Today TV, citing its sources, reported that the income tax department found that the company had made excessive and fraudulent deductions for its Sikkim manufacturing operations. It is estimated that these false claims are worth more than 1,000 crore. Several of these deductions were made, according to sources inside the company, under other specific sections such as 80-IC, India Today said in its news report. 

However, as reported by CNBC-TV18 on X (formerly twitter), the company has refuted rumours and allegations regarding the tax evasion.

According to reports from CNBC-TV18, the company has stated that information appearing in news reports, which indicates it is involved in tax evasion is factually incorrect.

The company further clarified that it completely cooperated with the income tax authority during the survey processes in September 2023, according to reports from CNBC-TV18. Additionally, it stated that it had responded to several questions it had later received from the income tax department.

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As per India Today news report the income tax authorities surveyed the offices and premises of Alkem Laboratories in September of last year after the information it received about significant tax evasion. In the months that followed, the Income Tax department verified and looked at data and balance sheets, and statements from responsible officials have been collected as part of the ongoing inquiry.

According to a news article by India Today, the income tax department's investigations also showed that a company, had been paying physicians and other medical professionals to write prescriptions for their company-made medicines.

"The period for which the investigation was conducted revealed over hundreds of crores worth of payments made to doctors by Alkem Labs. Sources also claimed that the probe results would lead to heavy penalties for Alkem Labs," said India Today in its news report.

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On the technical front, Riyank Arora, Technical Analyst Mehta Equities Ltd stated that Alkem Lab share price has touched a major support level of 4,700 on its daily and weekly charts. With the stock trading nearly 11% down in today’s trading session on negative news and sentiment, it should be interesting to see if the stock can hold above 4,700 on a daily closing basis. 

“If it does, then we can see a relief rally towards 5,100 in Alkem. However, a daily closing below 4,700 would be considered an immediate negative signal for the stock," said Arora. 

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.

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Published: 26 Feb 2024, 12:34 PM IST
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