Three electric vehicle manufacturers including Hero Electric, Okinawa under investigation for alleged FAME-2 fraud

Electric two-wheeler manufacturers such as Hero Electric, Okinawa Autotech International, and Benling India Energy and Technology are under investigation by the central agency. These are under investigation for fraud in availing incentives offered under the now-defunct Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme of the Ministry of Heavy Industries (MHI). The office premises of the three EV manufacturers were raided by the Serious Fraud Investigation Office (SFIO). In which it was alleged that they had grabbed subsidies worth about Rs 297 crore.

The probe is part of a drive against EV manufacturers who allegedly misused the incentive scheme by violating rules and regulations. The FAME II scheme, launched in 2019 to promote electric vehicles in India, had a total outlay of Rs 10,000 crore. It gave manufacturers incentives to use components made in India for their vehicles. The probe found that some EV manufacturers did not comply with this regulation and used parts imported directly or indirectly from China.

SFIO conducted the search operation against Hero Electric, Okinawa, and Benling India for FAME-II fraud amounting to Rs 270 crore. "The three companies had falsely shown compliance of the applicable guidelines to MHI in order to avail of the subsidy which later turned out to be incorrect and false," it said. It added that three companies manufactured their models using a number of banned parts under the FAME-II scheme.