Hero MotoCorp In Hot Water Amid Alleged Diversion Of Funds

Over in the Indian market, Hero MotoCorp is one of the biggest motorcycle manufacturers in terms of sales volumes. In 2022 alone, the motorcycle giant sold more than five million motorcycles. On average, the company has been selling close to half-a-million motorbikes every month in India. More specifically, it sold 519,474 motorcycles in May, 2023, according to data from a Livemint report. 

That being said, Hero, being the hero that it is, isn't immune to issues. On June 15, 2023, anonymous sources told Reuters that India's Ministry of Corporate Affairs has ordered an investigation be conducted on Hero MotoCorp. Specifically, this involves the brand's relationship with a third-party vendor, wherein there has been an alleged diversion of funds. 

According to the report, the investigation seeks to probe the ownership structure of Hero MotoCorp, and to see whether the company had any control over the third-party vendor. Meanwhile, the Ministry of Corporate Affairs deemed that the investigation be conducted in the "public interest," given Hero MotoCorp's high-ranking status in the Indian economy, as well as the global motorcycle industry. 

As of this writing, Hero MotoCorp has yet to release a statement about the matter. It did, however, respond to a query by Reuters stating, "We will provide all information, if and when it is sought from us by any regulatory authority." The investigation was ordered following a preliminary inquiry from India's Registrar of Companies, and was seen fit for a further, more detailed investigation. 

What this means for Hero MotoCorp is that the company's operations will, for now, at least, be subject to the scrutiny of the Ministry of Corporate Affairs. The company must submit any and all documents, records, and statements that the ministry asks of them during the investigation. 

It's worth noting that this isn't the only time in recent history that Hero MotoCorp has found itself in hot water with the Indian government. In 2022, the company found itself under close scrutiny of India's income tax authorities. The investigation even reached a point where authorities visited Hero MotoCorp headquarters, and even the home of company CEO Pawan Munjal, as part of what was described as a "routine inquiry." 

In other news, Hero MotoCorp, in partnership with Harley-Davidson, recently unveiled the X440, branded with the Milwaukee company's Bar and Shield. This bike marks the first fruit from the collaboration between the two companies, as well as the first single-cylinder, small-displacement model in Harley-Davidson's modern lineup.