Govt issues inspection order against Shree Cement; stock edges lower
- The order has been issued after taking note of issues with respect to related party transactions, corporate governance matters and issues pertaining to improper income tax filings.
The Ministry of Corporate Affairs (MCA) on July 11 issued an inspection order against cement manufacturer Shree Cement. The order has been issued after taking note of issues with respect to related party transactions, corporate governance matters and issues pertaining to improper income tax filings.
After the MCA order, shares of the cement manufacturer edged lower by two per cent during the trading session, hitting an intra day low of ₹23,574.30 apiece on the BSE.
The latest move comes days after the Income Tax (I-T) department conducted survey action at five locations of Shree Cement in Rajasthan. A survey action of the tax department is an investigative procedure carried out to ascertain the actual income earned by a tax payer for a financial year, according to reports.
During the survey, the I-T department verified deductions claimed by Shree Cement under section 80IA. The deductions claimed by the company are false, reports suggest.
Shree Cement has so far denied any tax evasion news reports to news channels, saying that the they dismiss any tax evasion related details so far. The company further said that the I-T survey is still ongoing.
"Income Tax Department is conducting a survey at our premises, and the company's management team is available and extending full cooperation to the officials. The information as required by the officials is being made available," the company said in a statement. According to the reports, the alleged tax evasion is said to be the biggest ever to date.
Rating agencies CARE Ratings and CRISIL recently reaffirmed their rating to A+1 for Shree Cements, according to regulstory filings by the company to the stock exchanges.
On July 11, shares of Shree Cement settled 0.27 per cent lower at ₹23,948.85, after hitting an intra day low of ₹23,574.30 apiece on the BSE.
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