Hero MotoCorp, the top two-wheeler producer in the nation, had a dramatic slump in its share price on Tuesday, falling more than 4%.
Following raids by the Enforcement Directorate (ED) at the home of the business' chairman, Pawan Munjal, the company's shares experienced a dramatic decline. The raid was a part of a larger money laundering inquiry.
At around 1:00 pm, today July 1, Hero MotoCorp's shares suffered after learning of the ED's measures, dropping 4.4% to Rs 3,063.
In accordance with the Prevention of Money Laundering Act's (PMLA) guidelines, search operations were conducted in Delhi and the nearby city of Gurugram. The inquiry was started after the Directorate of Revenue Intelligence (DRI) filed a complaint about a person who was reportedly connected to Pawan Munjal, who had previously been under investigation for carrying unreported foreign currency.
It should be recalled that the DRI had detained Pawan Munjal with foreign currency totaling Rs 81 lakh at the Delhi airport. As part of a tax evasion investigation into Hero MotoCorp, the Income Tax Department launched search operations at 25 locations connected to the company in March 2022.
What is PMLA?
The Prevention of Money Laundering Act (PMLA) was passed in 2002 in an effort to combat tax evasion and money laundering instances. The statute gives the government or the public authority the ability to take property acquired through illicit means. The law tries to stop the pervasive practice of turning money obtained illegally into legal currency. If someone is found guilty of money laundering, they might spend three to seven years in prison. Additionally, the offender faces a fine.
Hero MotoCorp is presently the largest two-wheeler automobile producer in the nation. In the past 20 years, it has increased its global footprint. It currently exports its goods to 40 nations in South and Central America, Asia, and Africa.
Along with serving as Chairman and Director of Hero MotoCorp, Pawan Munjal is a member of the boards of Indian School of Business, Hero Future Energies Global Limited, Pan Mining Private Limited, Bahadur Chand Investments Private Limited, Hero InvestCorp Private Limited, and Rockman Industries Limited.