News headlines all over the country, almost all over, carried the news about the IT raid at Hero Moto and how the team recovered a racket of bogus expenses to the tune of Rs.1000 crore.
Rs.1000 crore bogus expenses? That’s unthinkable for 99% of us Indians; for many, putting in a voucher for Rs.1000 and then waiting for it to get cleared in itself is a big deal. And that’s the paradox – a country of such huge inequalities.
But more than that, what is surprising is the market’s reaction – the stock rose today after the fall yesterday because the market was “convinced” about the clarification coming from the company.
The company issued a clarification on this news yesterday evening saying, “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. The Company has provided all support and cooperation, necessary documents and data to the authorities and will continue to do so if required. As and when the tax department concludes its findings and communicates to us, we will inform the exchanges suitably.”
So, then what was is that the IT department found? If they said yesterday that their search unearthed Rs.1000 crore in false expenses claims and over Rs.100 crore cash transactions for a farmhouse in Chhattarpur, Delhi; where does all that stand now after the “clarification?” Is the company lying or are the IT people lying? Somewhere something is amiss here.
But the bigger picture here is the IT raid. A company like Hero Moto, which prides itself being Indian first, with its ads promoting messages of nationalism, spending big time on corporate social responsibility and encouraging various sports, this comes as a rude shock. Hero is a trusted and well-respected brand name and this IT raid somehow creates a sense of unease – whom do we trust? Or, should we trust anyone at all where, on one hand there is the meticulously built public image and on the other, tax evasions? Nation’s pride and nationalism and tax hera-pheri; is that how most of our companies are? One teeth to show-off and another to eat?
We take every news with a chalta-hai attitude; the company issued a clarification and suddenly everything is alright? But what about the truth that it evades tax? Or is it that we allow every company to get away with some things grey as long as overall, it does well? Is topline and bottomline the only thing that ultimately matters?
When we say, “look into the management and corporate practices before investing,” will this tax mess stay or get washed away with more sponsorships, events and better margins?
The silver lining here – this is the first time ever that we have seen a big league company being publicly pulled up by the IT wing. Hope this trend continues – at least we will know who is a true hero, on the inside as well as on the outside.