FAME scheme case: Govt mulls clawback of subsidies, FIR against Hero Electric, Okinawa

Hero Electric is one of the leading electric two-wheeler manufacturers in the country. (Representative image)

The government is mulling over measures such as clawback of subsidies and registration of FIR against Hero Electric and Okinawa Autotech, in the case related to the alleged misappropriation of subsidies given under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, CNBC TV-18 reported on March 21.

The Centre is likely to take a call on the action to be taken against the two electric vehicle manufacturers in the next few days, sources privy to the development told the news channel, adding that the authorities have received legal opinion in the matter.

The sources claimed that the probe against Hero Electric and Okinawa revealed that they allegedly claimed subsidies of Rs 250 crore for imported components, but declared the consignments as being made indigenously. Both companies, as per the sources, cited non-disclosure agreements with component suppliers in their replies to the government.

Also Read | FM revises FAME outlay for FY24 to Rs 5,172 crore

Okinawa managing director Jeetender Sharma has denied the allegations of irregularity. "At Okinawa Autotech, we have always adhered to government policies. In fact, Okinawa was the first company in the industry to receive a FAME II certification in 2019. We have not been informed about any legal action in this matter by the authorities," CNBC TV-18 quoted him as saying.

"As a responsible corporate entity, we have submitted our documents to the relevant departments and support them at every step as and when required," he added.

Hero Electric was yet to issue a statement in response to the report.

Apart from the two companies, 12 other two-wheeler EV makers - Benling, Okaya, Jitendra New EV, Greaves Electric Mobility, Revolt Intellicorp, Kinetic Green Energy, Avon Cycles, Lohia Auto, Thukral Electric & Victory Electric - are under the radar. The investigations against them are currently underway.

The investigation into FAME scheme irregularities was initiated by government testing agencies Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology (ICAT) after whistleblowers raised apprehensions. As part of the probe, inputs from the commerce ministry and directorate of revenue were sought to crosscheck customs records and ascertain whether there was any deviation from the phased manufacturing programme, the CNBC TV-18 report said.