SFIO Seals Hero Electric Premises In Gurugram Over FAME-II Violations

India’s corporate fraud investigating agency has sealed the premises of Hero Electric Pvt. Ltd. in Gurugram over violation of FAME-II EV subsidy norms, deepening the troubles for a company that was India’s largest electric two-wheeler maker just five years ago.

“The notice is served on you so that you may ensure that the seal pressed by me on the said articles or other articles maintained in the name of Hero Electric Vehicles Pvt. Ltd…is kept intact,” a letter signed by Sumit Kasana, director (investigation) at the Serious Fraud Investigation Office, on 14 November showed.

“Please note that if the seal is not intact at the time of opening the constructed building, all the consequences as laid down in the Code of Criminal Procedure would follow.”

NDTV Profit has seen a copy of the letter, which has pasted on the Hero Electric building situated at Plot No. 57, Udyog Vihar, Phase-IV, Sector-18, Gurugram, Haryana - 122018. The SFIO, a statutory agency tasked with investigating corporate fraud, operates under the Union Ministry of Corporate Affairs.

Phone calls and WhatsApp texts to Naveen Munjal, managing director at Hero Electric, seeking a comment on the matter remained unanswered as of publishing this story. 

Naveen Munjal is the nephew of Pawan Munjal, the executive chairman of India’s largest two-wheeler maker Hero MotoCorp Ltd. The two had engaged in a legal battle over the use of the brand name ‘Hero’ for electric vehicles, which Naveen Munjal won. Hero MotoCorp currently sells electric scooters under the ‘Vida’ brand.

A market leader less than five years ago, Hero Electric fell off a cliff after it was found that the company had violated local procurement and import norms under the FAME-II EV subsidy scheme. Its manufacturing plant has been shut for more than a year now. The market share is negligible.

Additionally, dealers have had to hound the company over unpaid dues.

In August, at least 200 dealers of Hero Electric camped outside the company’s headquarters in Gurugram seeking dues that run into hundreds of crores. These include a ledger balance of Rs 300 crore, unpaid warranty expenses worth Rs 100 crore, and unsold electric scooters—delivered without battery or charger—worth Rs 150 crore.

“Dus rupaya bhi nahi mila hai abhi tak (not a penny has been paid so far),” Nishant Bansal, who operated two Hero Electric dealerships in Delhi, told NDTV Profit over the phone. He is saddled with Rs 60 lakh in unpaid dues and 60 scooters without battery and chargers. Overall, the dealers have unsold stock of 1,500 scooters lying with them.