Three EV makers raided for INR 297 cr subsidy 'fraud'

The corporate affairs ministry on Monday said the Serious Fraud Investigation Office (SFIO) carried out searches at three electric vehicle makers Hero Electric Vehicles, Benling India Energy and Technology, and Okinawa Autotech International, alleging these companies fraudulently availed subsidies under a government scheme for EVs.

"These cases arise from the fraudulent availing of subsidies amounting to INR 297 crore cumulatively by all the three companies under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme of the Ministry of Heavy Industries," the ministry said in a statement.

The three companies did not respond to ET's queries.

The SFIO probe revealed that several restricted parts under the phased manufacturing programme (PMP) guidelines were "either directly or indirectly imported from China thereby flouting the PMP guidelines under FAME - II", the ministry said.

Evidence like digital data, books and other material have been recovered during the search operations, it said, adding that further investigation is in progress.

The government had launched the FAME II scheme in 2019 with an outlay of INR 10,000 crore, revamping its earlier version, to promote electric and hybrid vehicles in India. The scheme and the PMP guidelines stipulated the manufacturing of some key components in India, for the vehicle to be eligible for subsidy.

For claiming subsidies, the three companies "had deceptively shown compliance with the applicable guidelines" to the heavy industries ministry, which was subsequently found to be incorrect and false, according to the statement.

Subsidy disbursements in the programme were linked to the PMP to ensure higher localisation as years passed. While these companies did not adhere to the PMP, they continued seeking FAME subsidy, defeating the intent of the scheme, the ministry said.