Hero MotoCorp shares dive 5% on report Pawan Munjal under ED lens

Shares of Hero MotoCorp took a beating in Tuesday's trade amid a media report that suggested Enforcement Directorate (ED) had raided Chairman Pawan Munjal's residence. A CNBC-TV18 report quoting sources suggested that a Prevention of Money Laundering Act (PMLA) case has been registered against Munjal regarding the same.

The development came after Hero MotoCorp had in an exchange filing on June 17 said that it had received a communication from the Ministry of Corporate Affairs (MCA) seeking certain information from the company. Hero MotoCorp had then said the two-wheeler maker would provide the information, as sought by the MCA.

The stock fell 5.34 per cent to hit a low of Rs 3,032.10 on BSE. The scrip is still up 13 per cent year-to-date.

The ED took cognisance of the Department of Revenue Intelligence case, according to sources, who added that the DRI had caught a close aide of Pawan Munjal with undeclared foreign currency at the airport.

Earlier the income tax department in March last year collected evidences that revealed that Hero MotoCorp has booked bogus purchases, made huge unaccounted cash expenditures and obtained accommodation entries, aggregating to the tune of more than Rs 1,000 crore, CNBC-TV18 suggested.

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The report further suggested that during March 23-26, the department carried out a search and seizure operation on various premises of Hero Motocorp as part of a tax evasion investigation.  The raids were also conducted on offices and residential properties of the company’s Chairman and Managing Director Pawan Munjal, it reported.

Also read: ED raids Hero MotoCorp CEO Pawan Munjal’s residence in connection with DRI case

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