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Hero MotoCorp shares tumble 3% as CEO faces FIR for alleged forgery

Oct 9, 2023

By: BlinkX Research Team

Shares of Hero MotoCorp, one of India's leading two-wheeler manufacturers, dropped by approximately 3% during Monday's trading session. The decline comes in the wake of the Delhi Police filing a First Information Report (FIR) against the company's Managing Director and CEO, Pawan Munjal, on charges of forgery. The complaint also implicates other individuals in the case.

This development follows recent investigations by the Directorate of Revenue Intelligence (DRI) and the Enforcement Directorate (ED), both of which have been questioning Hero MotoCorp's CMD in connection with a money laundering case. These investigations represent a significant escalation in the scrutiny facing Munjal.

In response to the news of the FIR, Hero MotoCorp's shares experienced a 4% decline, falling to Rs 2,925 on Monday, down from the previous closing price of Rs 3,035.75 on Friday. The company's total market capitalization stood at Rs 58,500 crore. Despite this recent drop, Hero Motocorp's shares had seen a 20% increase over the past six months.

In August of this year, the Enforcement Directorate conducted searches at Munjal's properties in Delhi and Gurugram, initiating a case against the 69-year-old automotive magnate under the Prevention of Money Laundering Act (PMLA). During the searches, assets valued at Rs 25 crore, including foreign currencies, gold, and diamond jewelry, were seized.

The anti-money laundering agency has accused Munjal of transferring Rs 54 crore in foreign currency overseas between 2014 and 2019. Additionally, he faces allegations of sending Rs 40 crore in foreign currency abroad with the assistance of a close associate.

As of the time of this report, Hero MotoCorp has not made any filings with stock exchanges regarding these developments. The company has established a global presence, operating in numerous countries across Asia, Africa, South America, and Central America.