SFIO holds search operations at Hero Electric, other cos for fraudulent availing of subsidies worth Rs 297 crores under FAME II

The Serious Fraud Investigation Office (SFIO) conducted search operations at three, Hero Electric, Benling India and Okinawa Autotech, for fraudulent availing of subsidies amounting to Rs 297 crores under the FAME, said the Ministry of Corporate Affairs' statement.

The statement said that the three companies under investigation had deceptively shown compliance with the applicable guidelines to the Ministry of Heavy Industries, which was subsequently found to be incorrect and false, to claim the subsidies.

"Upon investigations by SFIO, it is revealed that several restricted parts under the PMP guidelines were either directly or indirectly imported from China thereby flouting the PMP guidelines under FAME – II," said Ministry of Corporate Affairs in the statement.


During the search operations, evidences like digital data, books and other material have been recovered. Further investigation is under progress.

The FAME II scheme was launched in the year 2019 to promote electric and hybrid vehicles in India. The FAME-II scheme and the Phased Manufacturing Programme (PMP) guidelines, stipulated manufacturing of some key components in India, for the vehicle to be eligible for subsidy under the scheme.

Previously in October, Hero Electric has approached the Ministry of Heavy Industries (MHI) seeking settlement of ongoing disputes and release of pending electric vehicle (EV) subsidies, officials told ET.

The electric two-wheeler maker has agreed to cough up penalty for any violation or lack of compliance. "Hero Electric has approached us seeking a resolution of their pending issues...We are examining their request," a senior government official said.

Hero Electric, led by Naveen Munjal, was a beneficiary of MHI's Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) scheme. It, along with five others, was later found to be in violation of mandatory localisation norms and faced a government clampdown after a probe.

The Centre, on the other hand, sought to recover Rs 133 crore and penal interest from Hero Electric, alleging violation of FAME II norms.

Hero Electric was also barred from eligibility under any of the subsequent schemes as well. The company has also sought reversal of blacklisting and allowing it access to the National Automotive Board (NAB) portal for processing pending subsidies.