Baba Ramdev's Patanjali Ayurved Again Under Govt Scrutiny Over 'Dubious' Transactions

India's Corporate Affairs Ministry has reportedly issued a notice to Patanjali Ayurved Ltd., the traditional medicine company co-founded by yoga guru Baba Ramdev, seeking clarification on a set of financial transactions flagged as suspicious.

According to a Bloomberg report citing sources, the ministry acted on findings from a federal economic intelligence agency, which identified certain transactions as "abnormal and dubious." While the specific amounts involved have not been disclosed due to the preliminary nature of the inquiry, Patanjali has been given approximately two months to respond to the notice.

Officials also told the news agency that the Ministry of Corporate Affairs (MCA) will examine possible corporate governance violations and any signs of fund diversion as part of its investigation.

The report comes amid increased scrutiny of Indian corporations following financial mismanagement concerns at IndusInd Bank and Gensol Engineering, both of which are currently under regulatory probe.

For Patanjali Ayurved and its affiliates, this is not the first instance of regulatory action. Last year, a Patanjali unit received show-cause notices from the government for alleged non-payment of GST and wrongful refund claims.

In April 2024, CNBC-TV18 reported that the Directorate General of GST Intelligence (DGGI) issued two show-cause notices to Patanjali Ayurved Ltd. and Patanjali Foods Ltd. over alleged GST violations.

According to the report, DGGI’s Meerut and Chandigarh zones investigated circular trading between 2018 and 2022 involving fake invoices without actual supply of goods worth Rs 2,640 crore.

This allegedly inflated turnover, generated fake Input Tax Credit (ITC) worth Rs 15 crore, and led to tax evasion.

Separately, Uttarakhand GST authorities are probing Patanjali for similar violations involving goods worth Rs 2,100 crore, based on a referral from DGGI.

Patanjali Ayurved is a privately held company, with Acharya Balkrishna — a close aide of Baba Ramdev — serving as its promoter. Meanwhile, its subsidiary Patanjali Foods Ltd. is publicly listed. Shares of Patanjali Foods declined 3.86% today to Rs 1,680 apiece.