The Enforcement Directorate said on Friday that the executive chairman of Hero MotoCorp Ltd. Pawan Kant Munjal used foreign currency issued in the name of others for his personal expenses abroad to “beat” RBI rules and seize his assets worth Rs 24.95 crore in money laundering. investigation.
Three immovable properties (in the form of land) of Munjal located in Delhi have been provisionally attached under the provisions of the Prevention of Money Laundering Act, the central agency said in a statement.
Munjal (69) is also the CMD and Chairman of Hero MotoCorp and the assets are worth about Rs 24.95 crore.
The ED said its investigation found that “Pawan Kant Munjal got foreign/foreign currency issued in the name of other persons and then used it for his personal expenses abroad”.
It alleged that the foreign currency/foreign exchange was collected from the authorized dealers by the event management company on behalf of various employees and then “passed” to Munjal’s bank advisor.
“Relationship manager carried such foreign currency/cash/card exchange secretly for personal expenses of Pawan Kant Munjal during his personal/business trips.”
“The mode was adopted to overcome the limits of $2.5 million per year per person under the Liberalized Remittance Scheme (LRS),” the ED said.
Under the LRS, all permanent residents, including minors, are free to remit up to USD 2,50,000 per financial year (April-March) for any permissible transaction in a current or capital account or a combination of both, according to RBI.
The ED had raided Munjal and his companies in August after filing a criminal complaint against him under the PMLA.
This money laundering case was filed after he took cognizance of a charge sheet by the Directorate of Revenue Intelligence, filed under the Companies Act, 1962, accusing him of illegally taking foreign exchange/currency out of India.
“The prosecution complaint alleges that foreign currency/foreign exchange equivalent to Rs 54 crore was illegally taken out of India,” the ED said.
After the August raids, the ED seized valuables worth Rs 25 crore from various accused.
Hero MotoCorp became the world’s largest two-wheeler manufacturer in terms of unit sales volume in a calendar year in 2001 and has held that title for the past 20 years.
The company is represented in 40 countries in Asia, Africa and South and Central America.
The company said on its official website that “over the past 10 years, the company has rapidly expanded its capacity, geographic footprint, customer touchpoints and research and development capabilities to become a truly global brand.”
The auto giant and Munjal were also raided by the Income Tax Department in March last year as part of a tax evasion probe.
The Central Board of Direct Taxes, the administrative body for the income tax department, said that during these searches, the taxman found alleged illegal business expenses of more than Rs 800 crore and records showing that “unaccounted for” cash worth Rs 60 crore was used to purchase of land in Delhi and role of some shell (dubious) companies.
The automaker then said in a regulatory filing that it is a “law-abiding company with strong internal financial controls” and its “financial statements are properly audited.”