MRO-TEK retreated today on reports that some top officials of the company were arrested on charges of custom duty evasion.

The scrip of the Bangalore-based networking company slumped 6.1% to Rs 14.92 on BSE on the negative news. The stock witnessed high volatility in early trades, plunging 18% to Rs 13. Around 1.1 lakh MRO-TEK shares were traded on BSE in around an hour-and a-half.

High volatility has marked the scrip of late. It jumped by the maximum permissible level of 20% to Rs 19.65 on 20 June 2003 (on NSE) . And then plunged 14.5% to Rs 16.80 the very next session. Otherwise it has been range-bound at Rs 13-15 over the last few trading sessions.

As per reports, the Directorate of Revenue Intelligence has arrested three top officials of the company - chairman and managing director S Narayanan, joint managing director G M Nadi and chief financial officer R Ramaswamy. The arrests were made over allegation of customs duty evasion to the tune of Rs 8.40 crore by the company.

In May 2003, the company had said that the Directorate of Revenue Intelligence (DRI), Bangalore, was investigating certain imports during the period – 1 April 1998 to 31 March 1999 - with particular reference to adequacy of customs duty paid by the company in connection with the same. The company had earlier said that while the investigation was still in progess, the DRI had intimated to the company that, as per its findings and computation, customs duty had been 'short-paid' to the extent of Rs 6.50 crore pertaining to value of software imported with the equipment, and interest thereon of Rs 4.50 crore approximately.

Bangalore based MRO-TEK is last-mile accesses networking company.

The company recently announced its foray into the US markets by opening a sales office in San Jose, California, with an investment of Rs 6 crore. MRO-TEK is also looking at Japan, Korea, South America and Canada for expansion.

For FY 2003, the company reported a sharp 61.9% fall in net profit to Rs 6.94 crore (Rs 18.24 crore) on 33.7% fall in sales turnover to Rs 81.27 crore (Rs 122.68 crore).