Practo faces probe for alleged tax evasion

Bangalore-based healthcare startup Practo Technologies Pvt. Ltd is under the Indian tax authorities’ scanner for alleged tax evasion, according to a media report.

Practo, which is backed by Chinese investment firm Tencent Holdings, is investigated by authorities looking into whether it evaded tax through a cross-border corporate restructuring, Nikkei Asian Review reported.

Practo executives were summoned by the Bangalore office of the Department of Income Tax to explain differences in valuations of the company in 2014, the report said.

A lower valuation was used in capital gains tax due on the transfer of assets to an affiliate in Singapore, it said.

Tax officials reportedly raided Practo’s office in Bangalore in May this year.

In April, Practo laid off close to 150 employees as part of its annual performance appraisal cycle.

Practo, which has so far secured $179 million in external funding, last raised $55 million in January in its Series D round led by Tencent. During the latest funding round, the firm also announced its foray into health insurance aggregation where it will compete with startups such as PolicyBazaar and Coverfox.

Practo has also enhanced its presence in the enterprise space, acquiring five companies in the last nine years. It bought US-based data analytics firm Enlightiks Inc and its Indian operations late last year in a cash-and-stock deal valued at $13.9 million, according to VCCEdge, the data research platform of News Corp VCCircle.

It also acquired hospital information management solutions provider Insta Health, hospital appointment scheduling firm Qikwell, web- and app-based fitness management platform FithoWellness and product outsourcing firm Genii.

The company, which is on an expansion drive, is yet to turn profitable. Losses widened five times from Rs 12.9 crore in FY2014-15 to Rs 64.6 crore in FY2015-16, according to its filings with the Registrar of Companies.

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