THE ENFORCEMENT Directorate (ED) on Tuesday conducted searches at the residential and business premises of Hero MotoCorp executive chairperson Pawan Kant Munjal and others as part of a money laundering investigation.
The searches were carried out at the properties of the 69-year-old Munjal, the promoter of India’s largest two-wheeler automobiles manufacturer, in Delhi and Gurgaon apart from that of some entities linked to him, sources said.
The searches were carried out in connection with a case the ED lodged under provisions of the Prevention of Money Laundering Act. “Officials from the Enforcement Directorate (ED) 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 said in a statement.
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The ED case stems from a complaint filed against Munjal by the Directorate of Revenue Intelligence, an investigative arm of the Central Board of Indirect Taxes and Customs.
In March 2022, the Income Tax Department had conducted searches on multiple premises of Hero MotoCorp. Tax officials had said the search operations were part of a tax evasion investigation against the company.
“During the course of the search operation, various incriminating documents and digital evidence were found and seized indicating that the expenses ostensibly shown to have been claimed towards business purposes are not fully supported by evidence,” Surabhi Ahluwalia, official spokesperson for the Central Board of Direct Taxes, had said then.
“Expenditure aggregating to more than Rs 800 crore has been booked in the guise of purchase of services from a specific event management entity. This entity has siphoned off the money by way of layering. Such claims towards non-business purposes are inadmissible expenditure under the provisions of the Income-tax Act, 1961,” Ahluwalia had said.
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“In the search, it was also found that 10 acres of farm land at Delhi was purchased through a few paper companies. In such transactions, an unaccounted cash component of over Rs 60 crore was purportedly involved. The ultimate/real beneficiary of the land deal is a prominent person of the automobile manufacturer group. The intermediary who facilitated the said deal has admitted in his statement that a major part of the sale consideration was paid in cash,” she said.
The company later issued a statement, terming the exercise a “routine inquiry, which is not uncommon before the end of the financial year”.