Hero MotoCorp shares plunge over 3% on FIR against Pawan Munjal

Shares of Hero MotoCorp plunged as much as 3.64% to hit an intraday low of ₹2,925 after reports claimed an FIR (first information report) has been filed against the company's executive chairman Pawan Munjal by the Delhi Police. According to reports, Delhi Police has filed a case against Munjal alleging forgery, cheating and falsifying the books of accounts valued at ₹5.96 crore. The case has been filed following a complaint by Delhi-based logistics firm Brains Logistics against the two-wheeler manufacturer.

Following the development, the share price of the country's largest two-wheeler manufacturer closed 2.5% lower at ₹2,960. This is in line with the broader BSE Sensex, which closed 0.73% or 483.24 points lower at 65,512.39. During the session, the market capitalisation of the makers of Splendor bikes stood at ₹59,161.22 crore with 22,484 shares exchanging hands as against the two-week average of 8,094 shares. At present, the share price of the company is trading 8.7% lower than the 52-week high of ₹3,242.85, which Hero MotoCorp touched on August 1 this year. The share price of the company is trading 31.7% higher than the 52-week low of ₹2,246.75.

Notably, Munjal has been accused of claiming a tax credit of ₹55.5 lakh by generating fake monthly bills between 2009 and 2010. According to reports, the bills were signed by Hero MotoCorp. Apart from Munjal, the case has also been filed against the company's officers Vikram Kasbekar and Hari Gupta; and Manjula Banerji, who is a partner in Deloitte Hasken & Sells and was the company's auditor between Manjula Banerji.

The development comes months after the enforcement directorate seized assets worth ₹25 crore including gold, jewellery, foreign currency and incriminating documents from the residence of the senior officials of the company, including Munjal, in a case pertaining to money laundering.

In August, the Directorate of Revenue Intelligence (DRI) apprehended a close aid of Munjal in relation to money laundering and the possession of undeclared foreign currency. Last month, the ministry of corporate affairs initiated an investigation against the country's leading two-wheeler manufacturer in relation to lapses in corporate governance. Hero MotoCorp has been reportedly alleged of floating shell companies.

In March last year, the income tax department raided several premises of Hero MotoCorp and Munjal for alleged tax evasion. The government agency said an expenditure of over ₹800 crore made by the auto company has been booked in the guise of the purchase of services from a specific event management entity, which allegedly siphoned off the money.