• Notification Date: 05-03-2024
• Notification No: N/A

MCA to Complete Probe into Hero MotoCorp, MG Motor by June

The Ministry of Corporate Affairs (MCA) plans to fast-track and conclude its probe into corporate governance breaches, including discrepancies in financial accounts and funds diversion, by automobile manufacturers Hero MotoCorp and MG Motor India by June, a government official said. 

“Currently, the focus is on Hero MotoCorp and MG Motor India, on which the MCA investigation is ongoing. MCA aims to complete it early, in about four months from now, by June,” the official added. 

MCA ordered the investigation into Hero MotoCorp in June 2023 to probe into the alleged diversion of funds. It will also examine its ownership structure after acknowledging an inquiry by the income tax department. In March 2022, tax authorities searched premises associated with Hero MotoCorp in a case of alleged tax evasion. 

The two-wheeler maker is also under the Enforcement Directorate’s (ED) scrutiny. On November 10, the central agency said it had seized assets worth Rs 24.95 crore belonging to Pawan Kant Munjal, chairman and managing director and CEO of Hero MotoCorp, as part of a money-laundering investigation. 

Hero MotoCorp declined to comment on the matter. 

MG Motor India is among 665 Chinese companies under probe by the MCA. MG Motor is partly owned by Chinese state-owned automaker SAIC Motor. MCA is probing MG Motor India for alleged audit irregularities and discrepancies in account books and related party transactions. 

The ministry is examining the financial records of MG Motor India after the alleged corporate governance breaches came to light in the findings of a Registrar of Companies case in 2022. The government issued a notice to the company, inquiring about the reasons behind its losses in FY20, its first year of operations in India. 

“MG Motor India received a query early January of this year. As in the past, we fully cooperated with the authorities and provided all relevant information as per the required timelines. No further query has come to the company since then,” the company spokesperson stated. 

MG Motor recorded an 18 percent boost in retail sales totalling 56,902 units in 2023, of which about 25 percent were in the electric vehicle segment. 

SAIC Motor and Indian conglomerate JSW Group entered a strategic partnership in November 2023 to accelerate the growth of MG Motor in India.