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ED at two Hero offices, Pawan Munjal’s house

NEW DELHI : The Enforcement Directorate (ED), the federal agency responsible for investigating money laundering and other financial irregularities, on Tuesday conducted searches at the premises of two-wheeler maker Hero MotoCorp Ltd and the residence of executive chairman Pawan Munjal, two people familiar with the development said.

The company said it was cooperating with the agency. “Officials from the Enforcement Directorate today visited two of our offices in Delhi and Gurugram and the residence of our executive chairman Dr Pawan Munjal. We continue to extend all cooperation to the agency,” the company informed the stock exchanges.

ED investigates money laundering and violations of foreign exchange management law, among others, and often closely cooperates with other investigating agencies.

Citing government officials, news agency PTI reported that Tuesday’s searches were part of a money-laundering investigation, which stems from a Directorate of Revenue Intelligence complaint.

In March 2022, the income tax department searched Hero MotoCorp premises in connection with certain mismatches in the reported income and the information the department had accessed from other sources. Later that month, without naming the company, the tax department said it had conducted a “search and seizure operation on a leading automobile manufacturer group” along with two other entities covering more than 35 premises across Delhi-NCR. The department then said it had found that certain expenses were not backed by evidence. The company had called that visit by tax officials ‘routine’. At the time, Hero MotoCorp stated it was an ethical and law-abiding corporation maintaining the highest standards of impeccable corporate governance, Mint reported on 23 March 2022.

Hero MotoCorp, the world’s largest two-wheeler maker and the largest seller of entry-level motorcycles in India, clocked a 15% growth in profit after tax in FY23 at `2,910.6 crore, supported by an increase in two-wheeler sales. The company is targeting production of over 6.5 million units in FY24 for domestic and export markets, up 20% over last year’s total sales of 5.4 million units.

In its annual report, the company said it is keeping its price actions in the cost-sensitive segment subdued to aid higher demand and get ahead of the competition to expand its share of this market. The company also wants to enhance its share in the premium motorcycle and scooter markets as buyers move up the value chain to prefer more high-value products.

Hero has stepped into the ballooning market for premium lifestyle motorcycles with the launch of the Harley Davidson X440, a fully indigenized 440cc motorcycle it has co-created with the Milwaukee-based cult motorbike maker. The motorcycle comes at an aggressive starting price of 2.29 lakh ex-showroom, pricing that makes it a disruptive proposition given that it brings the cult brand within reach of the aspirational premium buyer. The motorcycle will be made at Hero MotoCorp’s Neemrana facility, with locally made motors, engines and chassis, and deliveries beginning during the festive season this year.


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Updated: 02 Aug 2023, 12:13 AM IST

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