Shree Cement ordered by Ministry of Corporate Affairs for inspection

On Wednesday, Shree Cement got a letter from the Ministry of Corporate Affairs' Regional Director (NWR) office ordering them of an inspection notice issued pursuant to Section 206(5) of the 2013 Companies Act. Shree Cement stated in a filing that it will follow the instructions.

Shree Cement was accused of evading taxes to the tune of Rs 23,000 crore in June, and as a result, the stock dropped by 10%. In breach of the principles of natural justice, the Central government has the unilateral authority to act in accordance with Section 206(5) of the Companies Act and to order an Inspector appointed by it to investigate the company's records.

According to sources, Income Tax inspectors searched Shree Cement Group locations around Rajasthan in June and found evidence of tax evasion totaling at least Rs 23,000 crore in the form of documents.

The Income Tax officers claimed that a review of the documents seized during the raids revealed that there was allegedly between Rs 1,200 and Rs 1,400 crore in annual tax evasion. The raids were conducted when I-T inspectors expressed doubts about the group's assertions regarding tax deductions.

Source: Media Reports