Sunil Munjal steps down from the position of Joint MD, Hero MotoCorp as part of family settlement deal

The automobile company Hero MotoCorp has announced that Sunil Kant Munjal exited the management role and also resigned from the position of Joint Managing Director.

As per the stock exchange filing, the company said that it received a family settlement agreement from the promoters of the company. According to the agreement the management and control of the company will be vested with the family group comprising Santosh Munjal, Renu Munjal, Suman Kant Munjal, and Pawan Munjal.

Further, the company had obtained a family settlement agreement from the promoter group in 2016 itself. In its filing, the firm stated that an agreement had been reached for the use of the trademark "HERO" between "Family Group" and Sunil Kant Munjal.

The company clarified that this is not a new development and it disclosed the 2016 agreement as required by the new Securities and Exchange Board of India (SEBI) rules.

"Further to the stock exchange filing made, it is being clarified that the disclosure filed by the company today is under regulation 30A as per the recent amendments in listing regulations, which require the subsisting agreements, if any, to be disclosed.

The family settlement agreement pertains to the year 2016 and there has been no change in the management or control of the Company in any manner at present. Sunil Munjal stepped down as Jt. MD in the year 2016 itself which was part of the regulatory disclosure at that time as well," said the company in an exchange filing.

Santosh Munjal, Renu Munjal, Suman Kant Munjal, and Pawan Munjal comprises the family group.

The company filing also highlights that Late Santosh Munjal, Promoter during execution of agreement, Renu Munjal, Pawan Munjal, a promoter and the chairman of Hero MotoCorp Limited, and Sunil Kant Munjal, a member of the promoter group, signed the agreement and it was formally signed on July 27, 2016.

 “The purpose of the agreement was the division of BML Munjal Group Entities, including the Listed entity between the parties to the agreement.The agreement is executed between the BML Munjal Family Members and Listed Entity is not a party to the agreement," said the company in its filing.

As per the exchange filing, the agreement was not a related party transaction and the listed entity was not a party to the agreement.

In the first week of August, the Enforcement Directorate raided the residence of Hero MotoCorp Chairman Pawan Munjal in a case of alleged money laundering, signalling a major escalation of investigation against a prominent businessman and triggering a fall in the share price of the company.

The Enforcement Directorate, conducted searches at his premises located in Delhi and neighbouring Gurugram, and registered a case against him under the Prevention of Money Laundering Act (PMLA), reported a news agency.

The ED took action after receiving inputs from the Department of Revenue Intelligence case. The DRI had also caught a close aide of Pawan Munjal with a large amount of undeclared foreign currency at the airport.

On Monday, Hero Motocorp share price closed 0.41% higher at ₹3,007.55 apiece on BSE.