ED raids Hero MotoCorp Chairman Pawan Munjal; shares plunge over 3%

Money laundering case: Hero Motocorp Chairman Pawan Munjal was raided by the Enforcement Directorate. A PMLA case has been registered, reported CNBC

Livemint
Updated1 Aug 2023, 02:17 PM IST
CEO of Hero MotoCorp Pawan Kant Munjal is facing charges under the Prevention of Money Laundering Act
CEO of Hero MotoCorp Pawan Kant Munjal is facing charges under the Prevention of Money Laundering Act(PTI)

The Enforcement Directorate raided the residence of Hero MotoCorp chairman Pawan Munjal in a case of alleged money laundering, signalling a major escalation of investigation against a prominent businessman and triggering a fall in the share price of the company.

The Enforcement Directorate, conducted searches at his premises located in Delhi and neighbouring Gurugram, and registered a case against him under the Prevention of Money Laundering Act (PMLA), reported PTI.

Also read: Hero MotoCorp discontinues Passion Pro motorcycle: Report

The ED took action after receiving inputs from the Department of Revenue Intelligence case. The DRI had also caught a close aide of Pawan Munjal with a large amount of undeclared foreign currency at the airport.

In March 2022, the Income tax department had conducted searches at offices of Hero Motorcorp over alleged tax evasion. The department had also conducted searches at Munjal's residence. HT contacted Hero MotoCorp for a response. The copy will be updated when the company issues a statement.

Hero Motocorp share price drops after ED raid

Soon after the news, company shares nosedived by as much as 3%. The company shares were trading 3.45% lower at 3092.90 apiece on BSE at 1 pm.

Also Read: Hero-Harley Davidson X440 booking ends on Aug 3, price hike ahead

Notably, the shares fell after touching their 52-week high mark of 3,242.85 apiece on BSE today. Hero Motocorp's share value has increased by 13.36% YTD and 8.42% in the last year.

Also read: Hero Moto expects rural demand jump

What is PMLA?

In a bid to battle tax evasion and money laundering cases, Prevention of Money Laundering Act (PMLA) was enacted in 2002. The act enables the government or the public authority to seize the property earned from the illegally gained sources. The act aims to curb the rampant practice of converting illegally earned money into legitimate money. 

In case a person is found guilty of money laundering than he or she can land up in jail for three to seven years. The guilty person will also be liable to fine. 

 Currently, Hero Motorcorp is the country's largest two-wheeler automobile manufacturer. It has strengthened its global presence in the last two decades. Currently, it exports its products across 40 countries in Asia, Africa, and South and Central America.

Also read: Hero MotoCorp sells more than 5.9 lakh motorcycles in May, expects trend to continue

Other than being the Chairman and Director of Hero Motocorp, Pawan Munjal is also a part of the Board of Directors of Munjal Acme Packaging Systems Private Limited, Pan Mining Private Limited, Bahadur Chand Investments Private Limited, Hero InvestCorp Private Limited, Indian School of Business, Hero Future Energies Global Limited, and Rockman Industries Limited.

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First Published:1 Aug 2023, 02:17 PM IST
HomeCompaniesNewsED raids Hero MotoCorp Chairman Pawan Munjal; shares plunge over 3%

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