Slump continues: Hero MotoCorp slumps 6% in two days amid DRI case involving Pawan Munjal

Shares of Hero MotoCorp Limited extended losses on Wednesday, falling 2 percent to Rs 3,021 at 10:05 am on August 2.

The automobile major has fallen 6 percent in the previous two trading sessions after the Enforcement Directorate (ED) conducted raids at the residence of Pawan Munjal, Chairman of Hero MotoCorp, after taking cognisance of a Directorate of Revenue Intelligence (DRI) case, CNBC TV-18 reported on August 1.

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Recently, the Directorate of Revenue Intelligence (DRI) apprehended a close associate of Pawan Munjal for carrying undeclared foreign currency. Sources told CNBC-TV18 that a Prevention of Money Laundering Act (PMLA) case has been registered against Munjal.

As per a report by Moneycontrol on June 15, Hero Motocorp had come under the government’s scrutiny. The Ministry of Corporate Affairs (MCA) launched an investigation into the company.

The MCA’s probe comes in response to a previous investigation conducted by the Income Tax department into specific transactions undertaken by Hero Motocorp.

On June 17, Hero MotoCorp made an official statement to the stock exchanges confirming that they have been contacted by the ministry, which is seeking specific information from the company.

In March last year, the Income Tax department gathered evidence pointing towards Hero MotoCorp’s engagement in several instances of financial irregularities. These instances encompassed activities such as recording fictitious purchases, substantial undisclosed cash outlays, and acquiring accommodation entries. Collectively, these actions were quantified to surpass Rs 1,000 crore, CNBC-TV18 reported.

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