This Large Cap Stock Crashed Over 11% After Reports Of Tax Evasion

  • Benzinga India
  • Stock Market News
This Large Cap Stock Crashed Over 11% After Reports Of Tax Evasion
Credit: © Reuters.

Benzinga - Shares of Alkem Laboratories (NS: ALKE ) were crashing on Monday after reports that the stock authorities had found large-scale income tax evasion at the generic drugmaker.

What Happened: The income tax department’s inquiry into pharmaceutical giant Alkem Laboratories has unearthed massive tax evasion practices by the company, India Today TV reported, citing sources.

Last September, following intelligence indicating substantial tax evasion, the income tax department carried out surveys at various offices and premises of Alkem Laboratories. The investigation progressed over the ensuing months, involving the recording of statements from relevant officials and scrutiny of data and financial records by tax authorities.

Dirty Money: Sources familiar with the matter told the TV channel that the income tax department uncovered instances where the company had allegedly made fraudulent and exaggerated claims for deductions related to its manufacturing facilities in Sikkim.

These purportedly bogus claims amount to more than ₹1,000 crore, as per sources within the company, with deductions sought under various specialised provisions such as section 80-IC.

Furthermore, the investigation revealed that Alkem Labs had been disbursing payments to doctors and medical practitioners in exchange for prescribing the company’s medications.

The investigation reportedly found payments worth hundreds of crores made to doctors by Alkem Labs. The findings of the probe could result in substantial penalties for the pharmaceutical company.

Price Action: Shares of Alkem Labs were down 10% to hit ₹4,879.05 in afternoon trade on Monday.

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