Hero MotoCorp gets clean chit in fund diversion probe
What's the story
The Ministry of Corporate Affairs (MCA) has found no breach of corporate governance or fund violation by Hero MotoCorp.
The investigation, which was launched nearly two years ago, has been closed with no further action.
An insider source told Moneycontrol that the report "has almost given a clean chit to the automobile manufacturer," confirming, "violation of corporate governance norms and fund diversion is not there in the findings."
Background check
Investigation was initiated over allegations of fund diversion
Notably, Hero MotoCorp, India's biggest two-wheeler manufacturer, has been under scrutiny since 2023.
The MCA had ordered an investigation into allegations of fund diversion and corporate governance violations.
This inquiry also looked into the company's ownership structure after a probe by the Income Tax Department.
The investigation was initiated after tax searches in March 2022 at various premises linked to Hero MotoCorp as part of a wider inquiry into alleged tax evasion.
Financial performance
Hero MotoCorp reports record profits and sales
Despite the investigation, Hero MotoCorp posted a 12% year-on-year (YoY) rise in net profit for the December quarter, amounting to ₹1,203 crore.
The company also recorded its highest-ever quarterly retail sales on account of record festive-season demand.
Along with this financial success, Hero MotoCorp's board has approved an investment of up to ₹5.15 crore for a solar power wheeling project at its Dharuhera and Gurugram plants.