In a recent development, the Delhi police have lodged an FIR (first information report) against Hero MotoCorp, India’s leading two-wheeler manufacturer, over accusations of issuing fraudulent invoices totaling ₹6 crore. These bills allegedly stem from a terminated agreement with a service provider and have raised concerns about the company’s purported manipulation of the income tax department to gain tax credits based on these counterfeit documents.
The origins of this controversy trace back to a complaint filed in 2021 by logistics service provider Brain Logistics. The case is currently under judicial consideration, adding another layer of complexity to the ongoing dispute.
Hero MotoCorp has recently found itself under the scrutiny of tax authorities and the Enforcement Directorate. This has led to raids at the company’s corporate headquarters and the residence of its Chairman, Pawan Munjal. Over the past year and a half, multiple allegations, including money laundering and tax evasion, have cast a shadow over the renowned two-wheeler manufacturer.
In response to these allegations, Hero MotoCorp issued a statement clarifying that the matter is both old and currently sub-judice. However, the news of the FIR took its toll on the company’s stock performance, causing a 2.57% decline to settle at ₹2,960 on the Bombay Stock Exchange. This drop contrasted with the broader BSE Sensex, which fell by 0.73%.
The complaint specifically names Dr. Pawan Munjal, the Chairman of Hero MotoCorp, along with two other officers from the company, Vikram Kasbekar and Hari Gupta. Additionally, Manjula Banerji, identified as an auditor for the company in 2009 and 2010, and a partner at Deloitte Haskens & Sells, is also implicated in the complaint.
According to the FIR disclosed by Mint, Brain Logistics alleges that Hero MotoCorp conspired to “cheat and falsify the books” by creating counterfeit monthly bills totaling ₹5,94,52,525 (approximately ₹5.95 crore) for the years 2009 and 2010. The logistics provider maintains that its contract with Hero MotoCorp had officially ended on March 31, 2009, making any subsequent billings erroneous.
Hero MotoCorp responded to the allegations by stating, “This is to inform that it is an old matter pertaining to the year 2009-10 with a disgruntled service provider, Brains Logistics Pvt. Ltd. (Promoter – Roop Darshan Pandey). It may also be noted that while the complainant has mentioned company officials in the complaint, however, no official has been named in the FIR. In 2013, Hero MotoCorp also registered an FIR against them, and the matter is ongoing before the competent court.”
As a result of these developments, Hero MotoCorp shares dipped by 2.70% to ₹2953.80 on a day when the BSE Sensex experienced a marginal decline of 0.73%. Industry experts caution that continued scrutiny from multiple government agencies could potentially deter investor interest in the company. However, the appointment of Niranjan Gupta as CEO and his prominence as the face of the company are seen as positive steps to differentiate the business from Dr. Pawan Munjal’s personal issues with various agencies. Moreover, investors who rely on Hero MotoCorp for its valuation-driven merits are unlikely to be deterred by these ongoing controversies.