The ministry of corporate affairs (MCA) has found no breach of corporate governance or fund violation by automobile major Hero MotoCorp, government sources have told Moneycontrol, almost two years after it ordered a probe against the company.
The probe report, which has been finalised and submitted to the ministry, doesn’t call for any further action, the sources said.
“No further action has been suggested. The investigation report has almost given a clean chit to the automobile manufacturer. Violation of corporate governance norms and fund diversion is not there in the findings of the report," one of the sources said.
Hero MotoCorp, India's largest two-wheeler manufacturer, has been under scrutiny over governance standards since 2023.
In June 2023, the ministry ordered an investigation to look into allegations of fund diversion and corporate governance violations. The inquiry also examined the company’s ownership structure following an investigation by the income-tax department.
The investigation stemmed from March 2022 tax searches at multiple premises linked to the company. The raids were part of a broader inquiry into alleged tax evasion, which raised concerns about potential financial mismanagement and governance violations.
Moneycontrol has reached out to Hero MotoCorp for comments and the copy will be updated when the response comes in.
For the December quarter, Hero MotoCorp reported a 12 percent year-on-year rise in net profit at Rs 1,203 crore. The company also achieved its highest-ever quarterly retail sales, driven by record festive-season demand.
Hero MotoCorp strengthened its market share in the 100cc segment with Splendor and in the 125cc category with Xtreme 125R and Super Splendor. Growth was further fuelled by a strong performance in both the EV and global businesses, the company said.
The two-wheeler major outpaced industry growth, with Bangladesh and Colombia leading the expansion.
Hero MotoCorp board also approved an investment of up to Rs 5.15 crore for a solar power wheeling project for the company’s plants at Dharuhera and Gurugram under the group captive mechanism.
At 11.46 am, the Hero Motocorp share was trading at Rs 3,630.95 on the National Stock Exchange, down 0.59 percent from the previous close.
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