Hero MotoCorp faces probe over diversion of funds

The Ministry of Corporate Affairs has ordered a probe into two-wheeler giant Hero MotoCorp’s link with a third-party vendor in a case related to alleged diversion of funds, according to a Reuters report based on government sources.

The investigation has been ordered in “public interest” to investigate the ownership structure of Hero MotoCorp and whether it controlled the third-party vendor, according to the Reuters report.

However, Hero MotoCorp did not comment on the issue as it said that it had not received any communication from the government in the matter.

Other than Hero MotoCorp, the MCA will also investigate the affairs of Salt Experiences and Management Private Limited (SEMPL) which it suspects to be a ‘linked entity’ of Hero MotoCorp, according to a report in the Economic Times sources added.

Hero MotoCorp has also come under the scrutiny of income tax authorities.The company last year said tax officials visited its offices and the home of CEO Pawan Munjal as part of what was called a “routine inquiry” into tax related matters.

Shares prices of Hero MotoCorp fell 4.2% on Thursday.