Ambuja Cements share price stays in green even as it faces double blow with customs penalty and CMO arrest

Ambuja Cements Limited, a major entity in India's cement sector, has been levied a significant penalty by customs authorities. In a recent disclosure to stock exchanges, the company reported receiving an order from the Office of Commissioner of Customs, Mumbai, on September 12 imposing fines and duties amounting to approximately ₹1.39 crore.

However, on September 13, at 11:30 AM, the shares of Ambuja Cements were trading in the green, up 0.83 per cent, at ₹634.15 on the BSE.

The order, issued on September 11, 2024, details the following financial obligations:

• ₹54,61,050 in customs duty
• ₹10,00,000 fine under Section 125 of the Customs Act, 1962
• ₹54,61,050 penalty under Section 114A
• ₹20,00,000 additional penalty under Section 114AA

The penalty arises from what authorities allege was a misclassification of goods, which led to the company being denied a lower basic customs duty rate.

In response, Ambuja Cements said, "The Company is taking appropriate steps to appeal against the said order imposing the penalty before the appropriate authority." Despite the significant monetary penalties, the company remains optimistic. Ambuja Cements added, "The Company does not foresee any material impact on financial or operational or other activities of the Company."

Arrest of Senior Executive adds to woes

To compound its troubles, Ambuja Cements suffered another major setback on September 12, 2024, when Rambhav Gattu, the company’s Chief Manufacturing Officer (CMO) in Chhattisgarh, was arrested on bribery charges. According to Odisha’s vigilance directorate, Gattu attempted to bribe the collector of the Barghar region by offering a bouquet and a packet of sweets containing ₹2,00,000 in cash, as per Reuters.

The vigilance directorate said, "A case has been registered against the officer for attempting to induce a public servant... The accused was arrested and forwarded to the court. Investigation of the case is in progress." Ambuja Cements and its parent company, Adani Group, have yet to issue any comment on the incident, as quoted by Reuters.