The Income Tax Department has launched a massive operation against Polycab India, a leading manufacturer of wires and cables, in Mumbai. Sources said tax officials raided at least 50 locations linked to the company, including the offices and homes of its top executives. The raids are reportedly based on some allegations of tax evasion and undisclosed income of the company.
The tax office has not yet issued an official statement on this. Polycab India is one of the largest players in the wire and cable industry in India with a market share of over 18%. The company also deals in electric fans, switches, LED lighting, solar products and pumps.
The company has a network of over 3,300 dealers and 1.25 lakh retail outlets across the country. The company reported a revenue of Rs 8,871 crore and a net profit of Rs 707 crore in the financial year 2019-20.
The reasons for the raids remain unclear
The exact reasons for the raids remain unclear and the Income Tax Department has not yet issued an official statement. However, sources speculate that the searches could be related to alleged tax evasion, financial irregularities or hawala transactions.
Polycab India shares take a hit
Following news of the raids, shares of Polycab India fell over 5% on the Bombay Stock Exchange (BSE) in early trade. The share price later recovered somewhat, but ended the day down 3.2%.
Previous allegations against Polycab India
This is not the first time that Polycab India has faced scrutiny from authorities. In 2017, the company was accused of overstating its inventory and manipulating its financial reports. However, the company denied the allegations and no further action was taken.
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