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Informist, Friday, Dec. 20, 2024

 

NEW DELHI – The Delhi High Court on Friday cleared the way for a probe by the Serious Fraud Investigation Office on Hero Electric Vehicles Pvt. Ltd. in a case related to alleged misappropriation of the Faster Adoption and Manufacturing of Electric Vehicles, or FAME-II scheme subsidies by the company. The high court refused to order any stay in the probe conducted by the Serious Fraud Investigation Office.

 

On Dec. 4, the high court had allowed Hero Electric to resolve its dispute with the Ministry of Heavy Industries by directing the company to approach the ministry official concerned on or before Dec. 12. The court had said that the Ministry of Heavy Industries would thereafter submit a report regarding the resolution with the company. Till then, the Serious Fraud Investigation Office would not proceed with its probe, the court had said.

 

On Friday, the court was informed that the settlement talks between the ministry and Hero Electric had failed, and the government had rejected the company's proposal. 

 

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 contested the claim, and sought the release of INR 5.7 billion as pending subsidy against sales already made. 

 

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 the two companies had violated phased manufacturing programme guidelines. Hero Electric had moved the Punjab and Haryana High Court against the blacklisting order.

 

In the probe ordered by the corporate affairs 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 Dec. 4, N. Venkataraman, Additional Solicitor General appearing for the Ministry of Heavy Industries, had 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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