Three electric two-wheeler companies -- Hero Electric, Okinawa and Benling India -- can be de-registered or blacklisted from future government schemes if they do not pay back the money they owe to the government under the FAME-II scheme, sources have said.

These companies earned ₹300 crore in violation of the norms under the FAME II scheme. The government has demanded that this amount has to be paid back as per the norms.

The companies are now in danger of being barred from future schemes not only under the Ministry of Heavy Industries (MHI) but also from other Central government schemes. In April last year, the MHI had fined Hero Electric ₹133.8 crore, Okinawa Autotech ₹116.85 crore, and Benling India ₹48.42 crore for violating the Faster Adaption of Manufacturing of Electric Vehicles (FAME-II) guidelines.

“Three companies were de-registered – Hero Electric, Okinawa and Benling. After that, the next step is debarment from all schemes of the Ministry (MHI). That has also been done for Benling and Hero Electric. It didn’t happen for Okinawa because they were in court at the time. The next step is blacklisting from all schemes under the Government of India. That has not happened so far because the Ministry of Finance gives the approval for debarment from all the ministries’ schemes/ policies for any company,” a senior official in the government told businessline.

The three companies declined to comment on the development, maintaining that the matter is “sub-judice.”

“The whole matter is under the scrutiny of the Delhi High Court. We would not like to comment on any matter that is sub judice,” Amit Kumar, Chief Executive Officer, Benling India told businessline.

“Since the matter is sub judice, we cannot comment,” said a spokesperson for Hero Electric.

Jeetender Sharma, Founder and Managing Director, Okinawa Autotech, also declined to comment stating the matter is still in court.

Read: Govt seeks ₹469 crore from 7 EV makers for FAME scheme violation

In 2022, certain complaints were received by the MHI regarding violation of the FAME-II scheme in which it was 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, especially from China, were also made in these complaints.

MHI investigated 13 companies, of which six, 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 in violation of the norms and fined a total of ₹469 crore.

Out of these six OEMs, Amo Mobility, Greaves Electric Mobility, and Revolt returned the subsidy with interest. But Hero Electric, Okinawa, and Benling did not return the incentives and were consequently de-registered in October/ November 2023. These companies have moved the Delhi High Court, maintaining that there was no wrongdoing from their side and that allegations of subsidy misappropriation are untrue.

Okinawa files writ petition

“We have filed a writ petition in Delhi High Court to recover our outstanding FAME II dues of upwards ₹425 cr and our case is subjudice. Okinawa Autotech always has been compliant with the scheme guidelines and the same was observed by MHI’s committee headed by Joint Secretary, Ms Mukta Shekhar. Okinawa has not availed incentives from beginning of the last financial year and we believe electric two wheeler industry has reached a stage where it is self sufficient,” a spokesperson at Okinawa said.