Hero MotoCorp’s Pawan Munjal’s properties Worth Rs.24.95 cr seized
The Enforcement Directorate (ED) on Friday accused Hero MotoCorp executive chairperson Pawan Kant Munjal of using foreign currency issued in the name of others for his personal expenditure abroad to “override” RBI rules and attached his assets worth Rs.24.95 crore as part of a money laundering investigation. Three immovable properties (in the form of lands) of Munjal located in Delhi have been provisionally attached under the provisions of the Prevention of Money Laundering Act (PMLA), the central agency said in a statement. Munjal (69) is also the CMD and Chairman of Hero MotoCorp Ltd, and the assets are worth about Rs.24.95 crore.
The ED said its probe found “Pawan Kant Munjal got issued foreign exchange/ foreign currency in the name of other persons and thereafter utilized the same for his personal expenditure abroad.” The anti-money laundering probe agency said that the foreign currency or foreign exchange was drawn from authorized dealers by an event management company in the name of various employees and thereafter “handed over” to Munjal’s relationship manager.
“The relationship manager carried such foreign currency/ foreign exchange in cash/ card secretly, for the personal expenditure of Pawan Kant Munjal during his personal/ business trips…The modus was adopted to override the limits of USD 2.5 lakh per annum per person under the Liberalised Remittance Scheme (LRS),” the ED said.
Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April-March) for any permissible current or capital account transaction or a combination of both, according to the Reserve Bank of India (RBI). The ED had carried out raids against Munjal and his companies in August after filing a criminal case under the PMLA against him.
This money laundering case was filed after taking cognizance of a Directorate of Revenue Intelligence (DRI) charge sheet, filed under the Companies Act of 1962, that accused him of taking foreign exchange or currency out of India illegally. “The prosecution complaint alleges that foreign currency/foreign exchange equivalent to Rs .54 crore was illegally taken out of India,” the ED said.
In another development, the Delhi High Court, in an order issued on November 3, stayed proceedings of the DRI, on which the ED case is based. In an interim order, the high court noted that Munjal has been exonerated by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the same set of facts and this was not disclosed before the trial court and that the petitioner has been able to make out a case for interim protection. 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 2001, in terms of unit volume sales in a calendar year, and has maintained the title for the last 20 years. The company has a presence across 40 countries in Asia, Africa, and South and Central America. The automobile giant and Munjal were also raided by the Income Tax Department in March last year as part of a tax evasion investigation.
The Central Board of Direct Taxes, the administrative authority for the Income Tax Department, had said that during these searches, the taxmen found alleged illegal business expenses of over Rs.800 crore and records showing that Rs.60 crore worth of “unaccounted” cash was used to purchase land in Delhi and the role of some shell (dubious) companies.
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