After Mumbai, Ola Electric Stores In Pune Come Under Scanner

The Maharashtra government has expanded its inspection of Ola Electric stores, mounting troubles for the EV maker led by founder-billionaire Bhavish Aggarwal.

Officials from five regional transport offices inspected as many as 26 Ola Electric stores in Mumbai and then Pune to check for trade certificates, people aware of the development said late night Wednesday. A total of 36 Ola Electric scooters were confiscated.

Until Tuesday, 10 Ola Electric stores in Mumbai were inspected and 10 scooters impounded, the people said.

Wednesday's action was on the basis of a complaint filed by Pritpal Singh & Associates, Gurugram, which alleged Ola Electric “is setting up showrooms, stores and service centres in Maharashtra by obtaining a single trade certificate”, according to an inspection report signed by Deputy Transport Commissioner Ravi Gaekwad.

Maharashtra's Transport Minister Pratap Sarnaik “has directed to take immediate action on the complaint and submit a report”, the inspection report stated. At least five RTOs—four from Mumbai and one in Pune—carried out the inspections.

NDTV Profit has seen a copy of the inspection report written in Marathi. An email sent to Ola Electric seeking a response on the matter remained unanswered at the time of publishing this story.

According to the Central Motor Vehicles Act, 1988, and Rule 33 of Central Motor Vehicles Rules, 1989, vehicle distributors and manufacturers have to obtain a business certificate for registering vehicles. Rule 35 of the Central Motor Vehicles Rules, 1989, states that every specific establishment, showroom or dealership engaged in the sale, trade or exhibition of vehicles is required to obtain a separate business certificate from the registering authority.

If such a trade certificate is missing, then the vehicle distributor and manufacturer will be liable to penalty under Section 192 of the Motor Vehicles Act, 1988.

To be sure, the “inspections” add to the troubles of a company that was till recently India's largest electric two-wheeler maker.

Just last week, two of Ola Electric's vendors—Rosmerta Digital Services Pvt. and Rosmerta Safety Systems Pvt. —sought to initiate insolvency proceedings against a subsidiary of the company over unpaid dues of about Rs 25 crore. Ola Electric has informed the stock exchanges of only one petition filed with the National Company Law Tribunal, Bengaluru. The companies processed vehicle registrations and generated high-security registration number plates, respectively, for Ola Electric scooters.

Additionally, the company is facing questions over the legality of its sales figures reported in February. Ola Electric claimed to have sold 25,000 scooters last month, but only a third of them could be registered. The VAHAN numbers aren't looking up in March either.