Ola Electric is surrounded by legal and financial challenges these days. Recently, transport officials of several states raided Ola’s showroom, seized vehicles and issued notices to the company.
The Bloomberg News investigation revealed that many of the Ola Electric’s over 4,000 showrooms do not have the necessary trade certificates, which is a legal mandatory. Following customer complaints, the authorities initiated action in the matter.
Why is a trade certificate necessary?
Under the Indian Motor Vehicles Act, it is mandatory to have a trade certificate near any auto showroom to keep vehicles without registration.
Vehicles can be confiscated if there is no trade certificate and legal action can be taken against the company.
Ola’s shares decline
Ola Electric shares recorded a huge decline after the raids.
Today, Ola’s stock in the stock market opened at ₹ 56.36 and fell to ₹ 54.12.
It has a 52 -week high ₹ 157.40 and Low ₹ 53.62.
Ola cleaning: What did the company say?
Ola’s spokesperson issued a statement via email, calling the allegations “wrong and biased”.
They said that,
“Our warehouses and distribution centers fully follow the law, and we have all the necessary approval.”
However, he did not give any clear answer to the showroom’s trade certificate.
Transport officials statement
According to Bloomberg News, at least six states transport officials are investigating the legal irregularities of Ola.
There have been cases of several disturbances related to the company’s aggressive expansion.
