MHI says no clean chit to Hero Electric, Okinawa, Benling for flouting FAME-II scheme

The enquiry on three electric vehicle (EV) makers - Hero Electric Vehicles Pvt Ltd., Okinawa Autotech Pvt Ltd. and Benling India Energy and Technology Pvt Ltd. – has found that they were flouting the FAME-II norms and there is no clean chit to them as yet.

According to sources at MHI, a new Committee headed by the Additional Secretary, MHI has been investigating the issue for quite some time and has come to the conclusion that the companies were violating against the government guidelines under the Faster Adaption of Manufacturing of Electric Vehicles (FAME-II) scheme and they need to pay the penalty amounts.

As per penalty set by the government, Hero Electric had to pay ₹133.8 crore, Okinawa Autotech ₹116.85 crore and Benling India ₹48.42 crore.

The development comes after certain reports that these companies have been given a clean chit.

• Also read: Govt continuing to work on detailed guidelines for electric vehicle policy

Investigation

“While the enquiry process was on, an officer of the level of Joint Secretary was, in the month of April 2023, entrusted with the task to enquire into the role of officials in the matter of irregularities in the scheme. The Joint Secretary came out with a report on December 30, 2023. It was learnt that in the month of February 2024, the December report had been found to be vague, incomplete and suffering from numerous shortcomings and contradictions, such as failure to properly consider the scheme guidelines and failure to examine any officials,” a source privy of the matter told businessline.

This report was not accepted by the Competent Authority. Thereafter, the Competent Authority had entrusted the entire matter of investigation of the matter to an independent five-member committee headed by an officer of the rank of Additional Secretary, on February 20 this year, the official explained.

“This new Committee headed by the Additional Secretary, has been investigating the issue for quite some time. According to the first part of its report, where, after examining all notifications and guidelines, the concerned testing agencies as well as officials of the auto section of MHI, effectively concluded that Scheme Notifications and Guidelines were clear and well understood by all relevant stakeholders, including test agencies, OEMs and MHI,” he added.

Origins of the Saga

The whole saga started in 2022, when certain complaints were received by the MHI regarding violation of the FAME-II scheme. These complaints had alleged that various FAME-II registered original equipment manufacturers (OEMs) were selling their vehicles in violation of the localisation requirements under the scheme. Allegations of rampant importing of vehicle parts were also made in these complaints.

MHI had conducted enquiry on 13 companies, out of which six companies including Hero Electric, Okinawa Autotech, Ampere Vehicles (₹124.91 crore), Benling India, AMO Mobility (₹83 lakh), Lohia Auto (₹11 lakh) and Revolt (₹44.30 crore) were found to be flouting the norms and were imposed fines totalling ₹469 crore.

And, out of these six OEMs, AMO Mobility, Greaves Electric Mobility and Revolt had returned the subsidies with interest within few months. But, Hero Electric, Okinawa and Benling did not refund back the incentives and were consequently deregistered in the months of October/ November 2023 (for availing the subsidies under FAME).

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