Patanjali Ayurved denies receiving MCA notice on proposed investigation over financial deals

While Patanjali Ayurved is a closely held company, its unit Patanjali Foods Ltd. is publicly traded. Its shares have declined close to 10% so far this month.

Baba Ramdev-led Patanjali Ayurved on Sunday, in a statement, denied receiving any communication from the Ministry of Corporate Affairs (MCA) for the proposed investigation by the ministry over dubious financial deals.

In a regulatory filing, the company stated, "based on confirmation from Patanjali Ayurved Limited, we may clarify that Patanjali Ayurved Limited has not received any communication from the Ministry of Corporate Affairs for the proposed investigation by MCA as appearing in mainstream media. Their legal counsels are
examining appropriate action in this regard."

Earlier, Bloomberg reported that the government has asked Patanjali Ayurved Ltd. to explain some transactions deemed suspicious, according to people familiar with the matter.

Also Read: Baba Ramdev's Patanjali faces scrutiny over financial deals

The report further said that the corporate affairs ministry sent a notice to the company after the economic intelligence wing found transactions it labeled as abnormal and dubious, the people said, asking not to be identified citing rules. They didn’t, however, disclose the amounts involved in the transactions, citing the early stage of the probe. The company will have about two months to respond to the notice, the people said.

This isn’t the first time Patanjali Ayurved or its affiliates have invited scrutiny. Last year, the company’s unit faced show-cause notices from the government for alleged non-payment of taxes and wrongfully claiming refunds, while India’s top court separately restrained the company from marketing its products as a cure for certain ailments.

While Patanjali Ayurved is a closely held company, its unit Patanjali Foods Ltd. is publicly traded. Its shares have declined close to 10% so far this month.

*With Agency Inputs