The Serious Fraud Investigation Office (SFIO) on Monday conducted search operations on the premises of three electric vehicle (EV) manufacturers — Hero Electric, Benling India and Okinawa Autotech. The searches were conducted on suspicion that these companies fraudulently availed subsidies worth Rs 297 crore under the faster adoption and manufacturing of electric vehicles (FAME) II scheme of the ministry of heavy industries.
After the searches, the SFIO said these companies, in order to claim subsidies under FAME II, had deceptively shown compliance with the applicable guidelines to the heavy industries ministry, which was later found to be incorrect and false.
The FAME II scheme, which was launched in 2019, was aimed at promoting electric and hybrid vehicles in the country.
As per the FAME II scheme and the phased manufacturing programme (PMP) guidelines, for the vehicle to become eligible for subsidy, some key components are stipulated to be manufactured in India.
“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. During the search operations, evidences such as digital data, books and other material have been recovered. The investigation is still under progress,” the agency said in a statement.
Experts said the SFIO’s search operations will be followed by a detailed forensic examination of the seized records to establish evidence of fraudulent practices.
“The investigation may include summoning company officials, verifying subsidy compliance with the PMP, and assessing any breach of the FAME II guidelines. If the wrongdoing is confirmed, appropriate legal proceedings could lead to penalties, subsidy recovery or even criminal charges. Additionally, this case may prompt stricter regulatory oversight of subsidy programmes and domestic production mandates,” said Ketan Mukhija, senior partner at Burgeon Law.
