In a significant development, the Enforcement Directorate (ED) raided the home of Pawan Munjal, Chairman of Hero MotoCorp, as part of an ongoing inquiry into charges of money laundering. In compliance with the provisions of the Prevention of Money Laundering Act (PMLA), the raids were conducted at properties in Delhi and Gurugram. This is not the first time Pawan Munjal has been subjected to such scrutiny, as he has previously been subjected to Income Tax Department raids on suspicion of tax evasion.
The most recent Enforcement Directorate (ED) raid on Pawan Munjal’s home occurred on Tuesday. The Enforcement Directorate raided Pawan Munjal’s home to investigate alleged money laundering activities. The investigation was sparked by a report from the Directorate of Revenue Intelligence (DRI), which focused on a person allegedly connected to the Chairman of Hero MotoCorp. This person was previously investigated for carrying undeclared foreign money.
As a result of the ED raid, Hero MotoCorp shares fell 5.34% on Tuesday, reaching a low of 3,032.10 on the Bombay Stock Exchange (BSE). Despite the recent fall, the company’s stock is still up 13% year to date.
Pawan Munjal is not the first time he has been scrutinised by the authorities. The Income Tax Department conducted searches at different Hero MotoCorp offices in March 2022 on suspicion of tax cheating. During this time, the department also raided Pawan Munjal’s apartment. The probe by the Income Tax Department yielded stunning results, including almost Rs 1,000 crore in fraudulent charges, significant unexplained cash expenditures, and infractions relating to a farmhouse purchase in Delhi.
The department even stated that Rs 100 crore from Pawan Munjal’s alleged black money cache was used to pay for the farmhouse, which violates Income Tax Act Section 269 SS.
Hero MotoCorp, the world’s largest maker of two-wheelers, has categorically denied all charges. The Income Tax Department, according to the company’s official statement, conducted routine investigations at two of its offices in Delhi and Gurugram, as well as at Pawan Munjal’s residence. The corporation emphasised that such questions are not uncommon prior to the end of the fiscal year. Hero MotoCorp says that it adheres to the highest corporate governance standards and is an ethical and law-abiding corporate enterprise.
The recent searches and ongoing investigations have had an immediate impact on Hero MotoCorp’s share price, which fell more than 7% intraday. However, the company continues to operate as usual and is actively working to introduce new electric vehicles to the Indian market. Hero MotoCorp recently announced a collaboration with Taiwanese two-wheeler manufacturer Gogoro to create electric vehicles with Gogoro’s swappable battery solutions, addressing the issue of charging infrastructure in India.