“Multi-locational searches were conducted on various premises of Manpasand Beverages on May 23. The searches resulted into an unveiling of a huge racket of creating fake units for availing fraudulent credit and committing tax evasion of Rs 40 crore and involving turnover of Rs 300 crore approximately,” said the CGST statement.
Search operation started on 23rd and they come out with this disclosure on 25th (Saturday) after media reports are already out.
Obviously internally people are allowed to exit first and then disclosure comes for public.
Resignation of directors - Vishal Sood (SAIF Partners), Bharat Vyas, Dhruv Agarwal
So now SAIF is free to exit its holding if it wants. Would be interesting to see what Motilal Oswal does with its holdings.
Stock down 20% in LC
SAIF partners bought 30%@Rs 80 per share between 2011 and 2014 sold 8% @Rs320 per share in 2015.They have recovered more than their cost and the residual 2 crore shares is what they have to dispose.Motilal and SBI mutual fund must be licking their wounds.
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Reputation loss and opportunity cost for SAIF. Even after red flags were raised long back by Amit Mantri, Deloitte resignation they found nothing amiss. Speaks about their due dilligence. Promoter owned private business in same field which was not even mentioned in DRHP. Its a different matter if they were turning blind eye to these issues, hoping to exit at higher levels.
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i remember the promoter once appeared on TV and the interviewer asked him about the reason for auditor’s resignation. The promoter at the best could only say something like “sabka apna apna reason hota hey. abb jo hogaya so hogaya uski depth mey baat karke kya faayda”
This was enough of a indication for me to exit, albeit at a minor loss.
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Despite stock falling 80% and visble red flags there were tons of retail investors who felt smart at having bought deep discount. No good stocks falls 80% without a reason.
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It is interesting to learn even after having SAIF on board member, how could GST fraud could happen?
OR
SAIF has serious evaluation issue?
They invest other’s money just like our MF managers. This was top holding for a MF, so was Varangee for another.
So moot point is what % of fund did SAIF invest in Manpasand.
I have seen people getting wiped out following RJ. What RJ holds as 0.1% of PF people invested 100% of PF in that stock as if it is sure lottery.
And hence the saying “fools rush in where angels fear to tread”
Outcome of the Board Meeting:
- Appointment of two independent directors: Mr. Bipin Rathod and Mr. Jitendra Dhivare
- Pledge of 100% of shareholding of promoter for working capital loan of Rs. 100 crores
- Resignation of compnay secretary Mr. Bhavesh Jingnar w.e.f. 30th May 2019
SAIF has already made x-multiple of the money they has invested. But that said the company was able to fool every one…PE funds, Mutual Funds, Institutional guys, Retail investors, Income Tax Authorities. I believe the auditors knew it before hand.
looks bad. Is this fraud a weakness of GST? The company seemed ok without GST fraud as source of income. What use this fraud?
Company CFO now, 13 years experience as accountant only at Manpasand.
https://www.linkedin.com/in/paresh-thakkar-52734b63/
Company Director has all the basics of his education completely covered, in very short style.
https://www.linkedin.com/in/abhishek-singh-a18872104/
I like this DESI style 
Vishal Sood, Bharat Vyas, Chirag Doshi, Milind Babar and Dhruv Agarwal, five of the six directors of the company, have resigned.
GST fraud is taken seriously, obviously.
So, Maths shows that 30% of turnover (revenues) and profits are fake (300 Cr and 40 Cr respectively)
A plant manager profile
https://www.linkedin.com/in/dhiraj-kumar-587bb881/
A higer-level Plant in-charge seems like
https://www.linkedin.com/in/mahesh-chauhan-576a5978/
These look good actually
https://www.linkedin.com/in/lalit-shrivastava-87b0b3166/
https://www.linkedin.com/in/sardul-pandit-348410117/
Am loving it.
Finquest will acquire nearly 22.16 percent stake in the company from its promoter Dhirendra Singh, who had in June offered to step down from day-to-day operations of the company. The promoter had entered into a call option agreement to sell half of his stake.
Finquest had given loan of 100 Cr.
Does that work out to a valuation of 500 Cr for the company?
Read more at: https://www.bloombergquint.com/business/manpasand-beverages-new-auditor-suspects-fraud-even-as-promoter-looks-to-divest-stake
Copyright © BloombergQuint
Points of special note:
- promoter is not running away (from the country), his stepping back (selling stake) is a positive, it means management change from doubtful characters to professionals
- Products have a market, cannot predict how he can face up Coke, Pepsi etc. though, hopefully the edge is maintained
- people prefer it’s swadeshi touch
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Any chances of Manpasand being bought over by Pepsi or Coca Cola or anyone else…IF IT COMES TO A FIRESALE???
IBC sales have generated good interest but that is partly because the deal-making has excluded the promoter-wala parties. These promoters have to be shocked into their ‘senses’, seems like. I would say the company makes for a good deal to beverage/agro-processing firms. FMCG space offers some opportunities for this to happen. At current prices, why not?
Today raised compliant on SEBI, SCORE. Believe SEBI would awake and take action.
Since last around 5 quarters there is no authenticate audit of finance not available. As multiple Auditors resigned.
My confidence in listed companies is shaking because governance issue and non-action by SEBI. Even after public news and Stock Exchange reporting.
If Promoters are unethical, which seems yes, in this case, suggest SEBI/GOI should initiate takeover action by Trusted and Competent Management and Board.
Thanks.
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