Delhi High Court Clears Way For SFIO Investigation Against Hero Electric
The Delhi High Court on Friday cleared the way for the Serious Fraud Investigation Office to continue its investigation against Hero Electric Vehicles Pvt., over a purported FAME-II EV subsidy fraud.
During the last hearing on Dec. 4, the high court had granted Hero Electric a chance to settle with the Union Ministry of Heavy Industries on or before Dec. 12.
Today, the high court was informed that the settlement talks between Hero Electric and the ministry have failed and that the government has rejected the settlement proposal put forth by the company.
On Dec. 2, NDTV Profit reported that India's Serious Fraud Investigation Office had conducted search operations at the premises of Hero Electric, Okinawa Autotech and Benling India over FAME-II violations.
These cases arose from the fraudulent availing of EV subsidy amounting to Rs 297 crore. Of this, Rs 133.5 crore was claimed by Hero Electric alone.
The SFIO investigation has revealed that several restricted parts under the phased manufacturing programme were either directly or indirectly imported from China, in violation of the FAME-II guidelines.
The scheme of Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II was launched in 2019 and ran until March 2024 to promote electric and hybrid vehicles, in what is now the world's third largest automotive market. It stipulated manufacturing of some key components in India, for the vehicle to be eligible for subsidy.
Hero Electric's Settlement Proposal Rejected
Appearing for Hero Electric, senior counsel Vikas Pahwa stated that the company representatives have met the government twice and that the company is willing to make the payment of Rs 133 crore subject to certain conditions.
The conditions being that that the interest component, if any, on this disputed amount be waived of. In addition, all proceedings against the company be abated, along with the SFIO proceedings. Further, the company should be allowed to claim its pending subsidy dues.
"The pending claims are amounting to about Rs 519 crores," Pahwa said.
On the other hand, Additional Solicitor General of India, N. Venkataraman, said that their demands are completely non-genuine. They want a complete waiver of the interest and they want the purported fraud amount adjusted against the subsidy amount due to them, he said.
"We don't accept their proposal, we reject it," Venkataraman said.
ASG Venkataraman was appearing for the Union Ministry of Heavy Industries.
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