The Serious Fraud Investigation Office (SFIO), operating under the Ministry of Corporate Affairs, has carried out search operations at the premises of electric vehicle manufacturers Hero Electric, Benling India, and Okinawa Autotech.

These searches form part of an ongoing investigation into the alleged misappropriation of funds under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme.

The allegations concern fraudulent claims of subsidies amounting to Rs. 3 billion (US$ 35.7 million) by the three companies under the FAME II scheme, which was introduced by the Ministry of Heavy Industries in 2019. The scheme, with an outlay of Rs. 100 billion, was designed to promote electric vehicle adoption and local manufacturing in India.

It offered subsidies to two-wheeler manufacturers, contingent upon the use of components made in India, in line with the scheme's Phased Manufacturing Programme (PMP) guidelines.

These guidelines mandated a specified level of localisation to qualify for incentives.

According to the Ministry of Corporate Affairs, the companies falsely claimed compliance with these localisation requirements to secure subsidies.

In its statement, the Ministry explained, "The three companies, for claiming subsidies, had deceptively shown compliance with the applicable guidelines to the Ministry of Heavy Industries, which was subsequently found to be incorrect and false."

The investigation conducted by the SFIO revealed that the companies either directly or indirectly imported several restricted components under the PMP guidelines from China.

During the search operations, evidence such as digital data, books, and other materials was seized from the companies' premises.