India's Shree Cement slumps after report of $2.81 billion tax evasion

BENGALURU (Reuters) -Shares of India's Shree Cement fell on Monday after a local television news channel reported that multiple searches at company locations revealed it had allegedly evaded taxes worth 230 billion rupees ($2.81 billion). Deductions claimed by Shree Cement are false and the company siphoned off 12-14 billion rupees every year, an NDTV report said on Saturday, citing sources, without specifying timelines.

"We are extending full cooperation with the Income Tax Department for the ongoing survey. The survey is yet to conclude, and we dismiss the speculative reports about tax evasion," the company said in a statement shared with Reuters.

"As a responsible corporate citizen, Shree Cement follows the highest corporate governance standards," it added.Last week, the company confirmed a CNBC-TV18 report stating that the tax department had surveyed its premises. Shares of the company opened 10% lower on Monday at 22,630.75 rupees, their steepest intraday drop in over three years, and closed 5.74% lower. The company's standalone tax expenses slumped more than 58% to 2.31 billion rupees in the financial year ended March 31, while profit fell 44% to 13.28 billion rupees, hit by a surge in other costs. ($1 = 81.9650 Indian rupees)

(Reporting by Varun Vyas and Manvi Pant in Bengaluru; Editing by Varun H K, Dhanya Ann Thoppil and Pooja Desai)