Delhi Police files FIR against Hero MotoCorp’s Pawan Munjal, stock falls 2.75%

New Delhi: Delhi Police has registered an FIR against Hero MotoCorp executive chairman Pawan Munjal. According to the FIR, the complaint has been lodged against five accused – company Hero MotoCorp, executive Pawan Munjal; Vikram Kasbekar and Hari Gupta, both identified as executives in Hero MotoCorp; and Manjula Banerjee (the company’s auditor in 2009 and 2010), identified as partners at Deloitte Haskens & Sells.

According to the report, the complaint alleges that the accused in collusion “falsified and falsified the books… and generated fake monthly bills against the complainant for the years 2009 and 2010 totaling ₹5,94,52,525 (₹5.95 crore). “

Brains Logistics further alleged that its contract with Hero MotoCorp expired on March 31, 2009 and thus all bills claiming debit after that date are incorrect.

At the time of first writing this story at 12.26 pm, the stock was at 2954.35, down 2.75 percent or 83.50 points from the start of the day. At 1.45 pm the stock fell another 3.10 points to 2949.15.

According to official sources, in August this year, the Enforcement Directorate (ED) conducted searches in connection with a money laundering probe involving Munjal and others.

The searches took place at the residential and business premises of the 69-year-old billionaire businessman in Delhi and neighboring Gurugram as well as at places associated with some related entities.

Sources said that the ED started the raid after registering a case against them under the provisions of the Prevention of Money Laundering Act (PMLA).

The company issued a statement acknowledging the ED visits to its two offices in Delhi and Gurugram, including the residence of its executive chairman Dr Pawan Munjal. The statement stressed the company’s commitment to cooperating with the agency.

Why complaint filed against Mujnal

The report said the ED case arose from a complaint filed against Munjal by the Directorate of Revenue Intelligence (DRI), an investigation arm of the Central Board of Indirect Taxes and Customs (CBIC).

According to reports, customs officials nabbed the executive based on information received from the Central Industrial Security Force (CISF).

During security checks just before the executive and Munjal boarded a British Airways flight to London from Delhi International Airport on August 20, 2018, the CISF found foreign currency worth over Rs 81 lakh in their hand baggage.

The Customs Department has seized this currency under foreign exchange management laws and it is said that legal proceedings in this matter are ongoing.

In March 2022, the Income Tax Department raided the premises of Munjal and Hero MotorCorp as part of a tax evasion investigation. The Central Board of Direct Taxes, the administrative authority of the IT department, reported that during these searches, tax officials uncovered alleged illegal business expenses of more than ₹800 crore. Additionally, they also found records indicating the use of ₹60 crore in “unaccounted” cash for the purchase of land in Delhi and the involvement of some shell companies.

In response to these findings, the automobile company said in a regulatory filing that it is a “law-abiding corporate, which has strong internal financial controls” and highlighted that its “financial statements are duly audited “

According to its website, Hero MotoCorp has been the world’s largest two-wheeler manufacturer by unit volume sales in a calendar year since 2001, having retained the title continuously for the last 20 years.

With a presence in 40 countries in Asia, Africa, and South and Central America, the company has established a significant global presence.

As stated on its official website, Hero MotoCorp highlights that “Over the last 10 years, the company has strengthened its capabilities, geographical footprint, customer touch points and R&D to emerge as a truly global brand.” D capabilities have expanded rapidly.”