Ola Electric's subsidiary facing insolvency petitions from vendors
What's the story
Ola Electric Technologies, a subsidiary of Ola Electric Mobility Ltd, is facing insolvency petitions from two vehicle registration service providers.
The companies are Rosmerta Digital Services Pvt and Rosmerta Safety Systems. Both have filed separate insolvency pleas against Ola Electric over unpaid dues.
The latest development comes as another challenge for the electric vehicle manufacturer.
Financial disputes
Outstanding dues and company's response
Rosmerta Digital Services has alleged that Ola Electric Technologies owes them a little over ₹22 crore, while Rosmerta Safety Systems is demanding nearly ₹2.5 crore in payments.
In a stock exchange announcement, Ola Electric confirmed the insolvency plea filed by Rosmerta Digital Services against its subsidiary in National Company Law Tribunal in Bengaluru, where Ola Electric is headquartered.
The company strongly disputes these claims and is seeking legal counsel on the matter.
Strategic changes
Shift in vehicle registration management
The insolvency petitions come as Ola Electric is revamping its vehicle registration strategy.
Last month, the company announced plans to "renegotiate" contracts with service providers like Rosmerta Digital and Shimnit India Pvt.
Bhavish Aggarwal, the CEO of Ola Electric, revealed on X last week that the company is moving its registration process "in-house."
This strategic move could possibly affect future vendor relationships and contract negotiations.
Regulatory hurdles
Ola Electric's ongoing challenges
The insolvency petitions against Ola Electric Technologies are only the latest in a series of troubles the company is facing.
A Bloomberg News investigation recently found that over 95% of Ola's 4,000 showrooms did not have the required approvals to display or sell unregistered vehicles.
This led transport authorities in several states to conduct raids, shut outlets, seize vehicles, and issue notices to the company.