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Informist, Wednesday, Dec. 4, 2024

 

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--Hero Electric moves HC against corporate affairs min ordering SFIO probe
--CONTEXT: SFIO found Hero Electric fraudulently availing FAME-II subsidy
--CONTEXT: Heavy industry min asked Hero Electric to return INR 1.3 bln sops
--Hero Electric to HC: Ready to resolve dispute with Heavy industry min
--HC asks Hero Electric to approach heavy ind min to resolve FAME-II dispute
--HC to SFIO: Don't proceed against Hero Electric till govt report to court
--HC to hear Hero Electric's case regarding FAME-II subsidy next on Dec 20
 

 

NEW DELHI – The Delhi High Court on Wednesday asked the Serious Fraud Investigation Office not to proceed or take any action till the Ministry of Heavy Industries gives a report on a resolution with Hero Electric Vehicles Pvt. Ltd. in a case regarding alleged misappropriation of the Faster Adoption and Manufacturing of Electric Vehicles, or FAME II scheme subsidies by the company. The high court will hear Hero Electric Vehicles' petition next on Dec. 20.

 

Hero Electric Vehicles had moved the high court against the order of the Ministry of Corporate Affairs for a probe by the Serious Fraud Investigation Office against the company. Earlier this month, the Serious Fraud Investigation Office found three companies engaged in manufacturing electric vehicles, including Hero Electric Vehicles, fraudulently availing subsidies to the tune of INR 2.97 billion under the FAME II scheme.

 

While the Ministry of Heavy Industries had asked Hero Electric to return sops worth INR 1.33 billion and additional interest over alleged violation of FAME II norms, the company has contested the claims and sought the release of INR 5.7 billion as pending subsidy against sales already made. 

 

On Wednesday, Hero Electric said it was ready to resolve the dispute with the Ministry of Heavy Industries. Noting this, the high court asked Hero Electric to approach the official concerned from the Ministry of Heavy Industries on or before Dec. 12. The court said that the Ministry of Heavy Industries would thereafter submit a report regarding the resolution with the company.  

 

The FAME-II scheme was launched in 2019 to promote manufacturing of electric and hybrid vehicles in India. To be eligible for subsidy under the scheme, companies had to manufacture some key components in India, in adherence to the Phased Manufacturing Programme guidelines

 

Last year, the Ministry of Heavy Industries had debarred Hero Electric and Benling India Energy and Technology Pvt. Ltd., two defaulters under its flagship Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II scheme, from participating in any of its incentive programmes in the future. The action by the ministry followed its findings that phased manufacturing programme guidelines were violated by the two companies. Hero Electric had moved the Punjab and Haryana High Court against the blacklisting order.

 

In the probe ordered by the corporate ministry in September, the Serious Fraud Investigation Office found that Hero Electric had claimed subsidies by deceptively showing compliance with the applicable guidelines as several of those parts were either directly or indirectly imported from China. "During the search operations, evidence like digital data, books and other material have been recovered," said an officer, adding that further investigation was underway.

 

On Wednesday, N. Venkataraman, Additional Solicitor General appearing for the Ministry of Heavy Industries, said that Hero Electric's case should be dismissed at the threshold for forum shopping as a case on a similar issue was pending before the Punjab and Haryana High Court.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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