As per the reports, The Central Bureau of Investigation (CBI), last week, arrested P. Kishore, along with an Additional Commissioner of Income Tax, Andasu Ravindar, in connection with payment of bribe to conceal a taxable income of Rs. 60 crore out of Rs. 116 crore unearthed during a search and survey operation in Everonn’s premises on 4 August 2011.
Now, the question is : What inspires an established and well respected CEO like P Kishore of Everonn commit fraud and try and bribe his way thru Income Tax?
– WHY should a listed Company like Everonn actually SURPRESS profits?
– Its counter intuitive… This is a LISTED Company and gets valued at XXX multiples on better profits and revenues – so why HIDE profits? If anything, shouldn’t profits be HIKED not suppressed??
– Was the issue that if the Income and hence the tax were identified – then the penalty of non payment of taxes would completely destroy the firm?
– Does this also mean that P. Kishore was determined NOT to reveal that his Company had concealed income so as to protect his reputation and also make sure his ‘star studded’ investor board remained on his side??
– I am very confused. How do auditors and accountants sign of on balance sheets that show cash flows that are not linked to P&L??
This is very depressing. Just as you see a new business category and model turn superstar, the skeletons come tumbling out…