Polycab India shares: No written communication from IT dept; no adverse impact on financials, says company

Shares of Polycab India Ltd will be in focus on Friday after the company in a clarification to stock exchanges BSE and NSE said it has not received any written communication from the IT department regarding the outcome of the December raids and that there is no material adverse impact on the financial position of the company, as of now.

The Ministry of Finance had in a January 10 statement, without naming any company said the income tax department had credible evidences that a company engaged in "cables and wires" made unaccounted cash sales of around Rs 1,000 crore. Polycab India shares fell 20.50 per cent to settle at Rs 3,904.70 on NSE, as it is believed that the company mentioned in the ministry release is Polycab India Ltd, which is the market leader in the cables and wires market and had reported income tax searches in December.

"The company understands that there is a press release titled ‘Income Tax Department conducts search operations in Mumbai’ published on January 10, 2024 (at 8:06 pm) by Press Information Bureau, Delhi, which does not specifically name any company. The company reiterates that as on date, the company has not received any written communication from the IT Department regarding the outcome of the search. As indicated above, the company has made intimation from time to time in relation to the said search proceeding," Polycab India said.

While the post search proceedings will take its own course, Polycab India said it would continue to fully cooperate with the IT Department in this regard. "There is no material adverse impact on the financial position of the company. The company shall continue to inform the stock exchange(s) from time to time in relation to development on the said search proceeding," Polycab India said.

The Ministry of Finance release said credible evidences recovered during the search established that the flagship company made unaccounted cash sales of around Rs 1,000 crore, which are not recorded in the books of accounts.

"Evidences of unaccounted cash payments of more than Rs 400 crore made by a distributor, on behalf of the flagship company towards purchases of raw materials, have also been seized. Further, non-genuine expenses in the nature of sub-contracting expenses, purchases and transport expenses, etc. aggregating to about Rs. 100 crore have also been identified in the seized evidences from the premises of the flagship company," the release suggested.

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