Edelweiss Financial Services shares take big hit, drop 7% on reports of I-T raid over tax evasion

Shares of Edelweiss Financial Services Ltd fell over 7 per cent in Friday's trade amid an agency report suggesting the Income Tax department team raided the offices of Edelweiss Group in Mumbai for several hours on Thursday. According to new agency ANI, searches were underway at premises linked to the group in Mumbai since Thursday morning over suspected tax evasion. No further information was revealed regarding the same.

The Economic Times quoting sources suggested that along with Edelweiss group, premises of certain entry operators were also searched.

A source told ET that the searches were in connection with the IT’s larger action on asset reconstruction companies (ARCs). Both the Mumbai and the Delhi investigation wings of the IT department were probing ARCs for alleged tax evasion, the report suggested.

Following the development, the stock fell 7 per cent to hit a low of Rs 59 on BSE. Later the scrip recovered sharply and was down just 1.88 per cent at Rs 62.26. A total of 93,000 shares changed hands on the counter on BSE against a two-week average of 1.17 lakh shares. Against buy orders of 74,785 shares, the scrip had sell orders of 94,783 shares.

With Friday's fall, the stock is down 2.5 per cent so far this calendar. The scrip hit a 52-week high of Rs77.40 and a 52-week low of Rs 49.40.

Earlier, in 2020, Edelweiss was in news after the Enforcement Directorate (ED) summoned Edelweiss Chairman and CEO Rashesh Shah in connection with its dealings with Capstone Forex Pvt Ltd, a company being investigated for a foreign exchange rules violation.

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