On June 16, Hero MotoCorp shares fell over 1% in early trade following information that the Ministry of Corporate Affairs started an investigation against the country’s two-wheeler manufacturer.

After conceding an earlier inquiry approved by the Income Tax department concerning definite transactions of Hero Motocorp, the Ministry of Corporate Affairs (MCA) has initiated an investigation.

As per the media report, the MCA will estimate the association between the business and a third-party vendor in a case connected to the suspected diversion of funds. Moreover, the MCA will also examine the proprietorship structure of the company.

Accordingly, at 9:22 am, Hero Motocorp shares were trading 0.6% lower at Rs 2,826.60 on the NSE. Buzz of the probe also saw the stock drop 4% on June 15.

However, this is not the first time the business has landed in government investigations. In March 2022, the income tax department directed raids on sites associated with Hero MotoCorp in various parts of Northern India in tax evasion cases. The officials were inspecting the company’s financial credentials and business transactions, along with those of its promoters.

Hero MotoCorp stated that the tax examiners visited its offices and the residence of CEO Pawan Munjal (now vice chairman) as part of a tedious inquiry.