Key Points
Raids conducted on 26 Ola Electric stores in Maharashtra and Madhya Pradesh
Company faces scrutiny over sales figures and trade certificates
Ministry seeks clarification on vehicle registration discrepancies
Vendors initiate insolvency proceedings against Ola subsidiary
The electric vehicle maker's challenges deepened as authorities in Madhya Pradesh conducted raids on its stores.
At least six Ola Electric stores were inspected -- two in Jabalpur and four in Indore -- on March 12 and March 18, as per reports. These stores were selling electric scooters allegedly without proper trade certificates.
During the raids, officials impounded 14 scooters in Jabalpur, while no vehicles were seized in Indore. The affected stores were given a three-day notice to provide an explanation for the violations, the reports mentioned.
The actions on Ola Electric stores in Madhya Pradesh came after similar raids took place in Maharashtra. Over the past three days, officials from five regional transport offices carried out inspections at 26 Ola Electric stores in Mumbai and Pune.
Some stores were found to be operating without trade certificates, while others were using a single certificate across multiple locations, which is not allowed, as per the report.
According to the Central Motor Vehicles Act, 1988, and related rules, every vehicle distributor or manufacturer must obtain a business certificate to register and sell vehicles.
Showrooms and dealerships must also have separate trade certificates for each location. Violations of these rules could lead to penalties under Section 192 of the Motor Vehicles Act.
The Ministry of Heavy Industries has also stepped in, seeking clarification from Ola Electric regarding differences between its reported sales figures and actual vehicle registrations.
Adding to the company's troubles, questions have been raised over the accuracy of its reported sales figures.
In February, Ola Electric claimed to have sold 25,000 scooters, but only a third of these were actually registered.
These inspections come at a time when Ola Electric is already dealing with declining sales as the latest VAHAN data suggests that March sales are not showing significant improvement.
Last week, vendors Rosmerta Digital Services Private Limited and Rosmerta Safety Systems Private Limited, moved to initiate insolvency proceedings against the company's subsidiary over unpaid dues of around Rs 25 crore.
These companies were responsible for processing vehicle registrations and generating high-security registration number plates for Ola's electric scooters.
