Shares of Hero MotoCorp slumped 7.08% to Rs 2,208.35 on Tuesday after media reports said the income tax (I-T) department has found that the company made bogus expenses of over Rs 1,000 crore and cash transactions for a farmhouse in Delhi worth over Rs 100 crore.
In a notification to the BSE, the company said: “The allegations made in the press report are not borne out of any document that have been served on us or our internal documents. Therefore, we categorically deny the speculative press reports.”
The income tax officers conducted search operations on about 40 premises of largest two-wheeler maker Hero MotoCorp for a few days beginning March 23. The tax officials said the operations were part of a tax evasion investigation against the firm.
gThe assessment proceedings pertain to the company’s financial transactions for multiple years based on documents/electronic devices seized during the search operations,” an official told FE. The company had booked bogus purchases and had unaccounted cash expenditures, the official added.
A tax demand on unaccounted financial transactions would be issued to the company after the assessment proceedings are completed, another official said.
The company told the BSE that “as and when the tax department concludes its findings and communicates to us, we will inform the exchanges suitably”.
gHero MotoCorp is a law-abiding corporate with robust internal financial controls and its financial statements are duly audited. We are conscious of our obligation under the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015; we have been discharging the same on a regular basis and shall continue to do the same. As a matter of fact, we do not comment/respond on speculative news,” the company told the exchange.
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Offices and residential premises of the company, including that of chairman and CEO Pawan Munjal located in Gurugram (Haryana), Delhi and a few other locations were covered in the I-T search operation.
Hero MotoCorp became the world’s largest two-wheeler manufacturer in 2001 in terms of unit volume sales in a calendar year, and has maintained the title for the past 20 consecutive years. Till date, it has sold over 100 million units across domestic and international markets.
Led by Munjal, the company has presence across 40 countries spanning Asia, Africa, and South and Central America. The company continues to have a leading position in the domestic two-wheeler segment.
