Delhi HC Asks SFIO To Continue Probe Against Hero Electric

Amid the alleged FAME II scheme violation charges, the Delhi High Court has reportedly asked the Serious Fraud Investigation Office (SFIO) to continue its investigation against Hero Electric Vehicle. 

As per ET’s report, the approval came yesterday (December 20), right after the court was informed that the settlement talks between Hero Electric and the Union Ministry of Heavy Industries failed. The government rejected the settlement proposal sent by the company.

Earlier this month, the court reportedly restricted SFIO from taking any action against Hero Electric and put a pause on investigation. Back then, the court also allowed Hero Electric to send a settlement proposal to the ministry. 

The probe began back in March this year when Hero Electric, Okinawa Autotech and Benling India failed to return the subsidies which were wrongly obtained under the phase II of Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.

In October, Hero Electric agreed to pay penalties for any violation or lack of compliance related to the EV subsidy scheme. Additionally, the EV manufacturer approached the Ministry of Heavy Industries (MHI) to settle the dispute.

Just a few days later, SFIO sealed Hero Electric’s Gurugram premises amid this probe. At that time SFIO’s Director of Investigation, Sumit Kasana warned that breaking the seal would have legal consequences under the Code of Criminal Procedure.

Earlier this month, the authority also conducted search operations at the premises of Hero Electric, Benling India and Okinawa Autotech and found that they availed subsidies worth INR 297 Cr under the FAME-II scheme.

In 2023, the central government asked seven two-wheeler EV makers to return subsidies worth INR 469 Cr for flouting localisation norms under FAME II scheme.

As per the guidelines of the scheme, incentives were allowed only to the manufacturers using made in India components for production of EV. However, the investigation revealed that these seven players used imported components.

In September, the union cabinet introduced the PM E-DRIVE scheme, which will effectively replace the FAME scheme. This scheme will have an outlay of INR 10,900 Cr for a period of two years, which is higher than the INR 10,000 Cr initial outlay of the FAME- II scheme.