ED searches 11 locations linked to Hero Moto, Pawan Munjal's residence

The Enforcement Directorate (ED) Tuesday conducted searches at 11 locations on premises linked to Hero MotoCorp, sources in the know told ET.

ED's probe was reportedly in connection with the Directorate of Revenue Intelligence's (DRI) case allegedly pertaining to carrying of excess forex by Amit Bali, an alleged close aide of Pawan Munjal, Executive Chairman of Hero MotoCorp.

"Officials from the Enforcement Directorate 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," spokesperson for Hero MotoCorp said.


In August 2018, Munjal was reportedly deplaned at the Indira Gandhi International Airport, New Delhi, after a person identified as Amit Bali was found to be carrying alleged foreign currency equivalent of ?81 lakh in his cabin luggage, which was found during the security check in by CISF officials.

Bali had subsequently told the Customs department official that he was carrying the forex on behalf of Salt Experiences and Management Pvt (SEMPL) and that it belonged to Munjal.

The Customs department subsequently sent a show-cause notice to Munjal. It had alleged that Bali was the 'lynchpin' of the case who ostensibly carried forex in excess of the prescribed amount on several past occasions, and failed to declare them to customs authorities.

The probe had revealed that SEMPL had a yearly turnover of ?200 crore, and between 2014 and 2018, it had business of ?785.96 crore from Hero - without any written contract.

However, Hero had contended that it was a client of SEMPL and was merely a recipient of services provided by SEMPL.

In March last year, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) ruled in the favour of Munjal.

"Hero MotoCorp had arranged SEMPL as the service provider for event management outside India and it was the responsibility of SEMPL to acquire foreign exchange which was acquired by SEMPL and handed over to Amit Bali for discharge of the contractual obligation of organising and arranging meetings," said the tribunal ruling. "The Commissioner (Appeals) has merely on conjectures and surmises assumed the liability of the appellant in relation to the export of foreign currency."

Other than the ED, I-T and Ministry of Corporate Affairs (MCA) is also probing the books of HeroMotocorp.

Earlier this year, the MCA ordered an investigation against Hero MotoCorp over alleged breaches of corporate governance norms, official sources aware of the probe told ET.

The probe initiated under 'public interest' will investigate the true ownership of certain linked companies. Other than Hero MotoCorp, the MCA will also investigate the affairs of Salt Experiences and Management Pvt (SEMPL), which it suspects to be a 'linked entity' of Hero MotoCorp, sources added.

The government ordered an investigation under sections 210(1)(c), along with section 216, of the Companies Act, added the person.

Section 210(1)(c) allows investigation into the affairs of a company in 'public interest'. Section 216 allows investigation of ownership of a company.

In March 2022, Hero MotoCorp was raided by the income tax department over alleged tax evasion. The department had even covered the residence of Pawan Munjal, Chairman, Chief Executive Officer and Managing Director of Hero MotoCorp while conducting the searches. The Central Board of Direct Taxes, the department's parent, had not named the company but said in a statement that it found alleged illegal business expenses of over ?800 crore. It had also alleged that it had found 10 acres of farmland in Delhi was purchased through a few companies.