FAME-II investigation: Hero Electric gets 10 days to submit papers

Revolt Intellicorp to pay back Rs 44 crore

The Ministry of Heavy Industries (MHI) has given a 10-day extension to Hero Electric to submit relevant documents in connection with the investigation into the alleged violation of the Phased Manufacturing Programme (PMP) guidelines under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) scheme. 

Revolt Intellicorp, which is also under investigation, has agreed to return Rs 44 crore that it received as subsidy under the scheme. 

Executives of these two electric two-wheeler makers appeared before the ministry in connection with the probe. Of the other five companies under the scanner, Benling India, Amo Mobility, and Lohia Auto have agreed “in principle” to return the subsidy amount, while replies from Okinawa Autotech and Ampere Vehicles (Greaves Cotton) are awaited. 

Executives of Okinawa Autotech are likely to meet ministry officials on Friday and present their case.

Hero Electric executives, who appeared before the ministry along with a legal team, sought more time to submit relevant documents to back their claim that the company did not violate any FAME-II norm. “The ministry has agreed to give them (Hero Electric) a 10-day extension after consulting with legal experts,” a senior government official said. The electric two-wheeler maker had received Rs 133 crore as subsidy under the scheme.

Though the ministry gave an extension to Hero Electric, officials working with the government’s testing agencies said they expect nothing new from documents promised by the company and that they have vetted its already submitted papers twice.

“We have already checked their invoices and other relevant documents. There was rampant use of imported parts, which went against the PMP guidelines. They are unlikely to submit anything fresh this time, too,” said an official from the testing agency International Centre for Automotive Technology.

In a recent interview with Business Standard, Kamran Rizvi, secretary, MHI, warned the “errant companies” of legal action — ranging from civil liability to criminal liability — if they refuse to return the wrongfully claimed subsidy money to the government.

“The investigation was done in a transparent manner by our testing agencies, the Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology, which are the nodal agencies in this regard,” Rizvi said.

“A strip-down test was done for every OEM model. Two units of each model sold by an OEM since 2019 were repurchased from their existing owners and tested in front of respective OEM representatives,” he said, adding, “A detailed report of the test results was also sent to respective OEMs.”

The seven OEMs have been asked to pay back around Rs 469 crore. According to the notice issued by the MHI dated April 29, Okinawa would need to repay Rs 116 crore and Ampere Vehicles has to pay Rs 124 crore to the government.

Meanwhile, Sanjay Kaul, chief evangelist, Society of Manufacturers of Electric Vehicles (SMEV), said the industry body has sent a letter to Heavy Industries Minister Mahendra Nath Pandey to defuse the crisis in the EV sector. “Since it is not the intention of the government to shut down these companies, at least allow them to upload fully compliant models on the National Automotive Board (NAB) portal, until the issue is sorted,” Kaul said in a tweet.