Hero MotoCorp shares tank 7% after IT raid reveals ₹1,000 crore bogus expenses
Hero MotoCorphas reportedly been found reporting ₹1,000 crore in bogus expenses.
- Doing so allows the company to claim it as a deduction, thereby reducing its taxable income.
- Hero MotoCorp has reportedly stated that this is nothing more than a “routine check”.
AdvertisementHero MotoCorp, one of the leading two-wheeler companies in India, has found itself entangled in a case allegedly involving ₹1,000 crore worth bogus expenses, revealed in a raid by the Income Tax (IT) department.
Reporting bogus expenses allows the company to claim them as a deduction, thereby reducing the income liable for tax.
According to a report by CNBC TV18, the Income Tax department had conducted a raid between March 23 and March 26 at the premises of the company. While the department is yet to release an official statement in the matter, news agency ANI says its sources have revealed that “incriminating evidence” has been found, putting Hero MotoCorp in the dock.
Hero MotoCorp’s shares tanked over 7% in reaction to the news. The share price closed at ₹2,210, recovering from the day’s low of ₹2,154.
According to the CNBC TV18 report, the IT raids were carried out on two of Hero MotoCorp’s premises – in Gurugram and Delhi, apart from the residence of the company chairman and chief executive officer,
The company brushed aside the concerns in a statement, stating that this was a “routine check” and it is “business as usual”. While it’s not unheard of for the Income Tax department to conduct searches and raids towards the end of the financial year, the presence of incriminating evidence is a cause for concern.
Business Insider has reached out to the company for a statement.
Update: The company has issued the following statement, filed with the stock exchanges.
“The allegations made in the press report are not borne out of any document that have been served on us or our internal documents. Therefore, we categorically deny the speculative press reports.
We wish to clarify that officials from the Income Tax department visited our offices in the previous week. As and when the tax department concludes its findings and communicates to us, we will inform the exchanges suitably.”
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