Warehouse services Sohan Lal Commodity under income tax scanner

Sohan Lal Commodity Management (SLCM), one of India’s largest warehouse service providers for MCX, has come under the scanner of the income tax department. SLCM and its related entities including North End Foods Marketing (NEFM) were surveyed by the income tax department this week, sources told Business Line.

The tax department was looking into deals involving NEFM, which is the common entity from which all the proxy or connected entities to the SLCM group were receiving funds, acquiring stock from the exchange platform and subsequently transferring them to the group entities via off-market transfers, the sources said. An earlier order by market regulator SEBI had observed that the trading entities from NEFM group had prima facie avoided a penalty of ₹47.14 crore by not disclosing the collective beneficial position. The tax department is looking into this, too.

SLCM was earlier an accredited warehouse service provider for Mentha Oil at MCX. In 2016, based on a SEBI notice, MCX had initiated an enquiry against SLCM for violating the warehousing norms of SEBI.

SLCM had investments from private equity investors including Nexus Venture Partners, Mayfield Funds, Everstone Capital, Creation Investments Capital Management, Emerging India Fund,  responsAbility Participations Mauritius and aAgRIF Cooperatief UA.

Market players say that around late 2017, anticipating SEBI action, SLCM was not allowing withdrawal of stocks from its warehouses. Later, both MCX and SLCM announced that they had settled the matter.

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BSE had announced a tie-up with SLCM in May 2018. SLCM is the accredited warehouse service provider for Indian Commodity Exchange’s (ICEX’s) Steel delivery.

Other group companies of SCML are SLCM Limited (Myanmar) and Kissandhan Agri Financial Services Pvt Ltd (KAFPL).

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