Ola Electric shares tanked 4% after a Bloomberg report said Indian state governments have conducted raids, closed showrooms, seized vehicles and sent show-cause notices to the company on flouting norms.
Stock market today: Shares of Ola Electric, the electric two-wheeler (2W) manufacturer led by Bhavish Aggarwal, dropped over 4% on Monday, March 10, following reports of raids, vehicle seizures, and showroom shutdowns at the company.
A Bloomberg report suggests that the company is in regulatory trouble, inviting warning letters from the government for flouting rules under India’s Motor Vehicles Act.
The report suggested that on the back of customer complaints, transport authorities across Indian states have conducted raids, closed showrooms, seized vehicles and sent show-cause notices querying the Bhavish Aggarwal-led firm.
Out of approximately 3,400 showrooms for which data is available, just over 100 locations held the trade certificates required under India’s Motor Vehicles Act, as per Bloomberg’s investigation. This means more than 95% of the stores Bloomberg reviewed lacked the essential certification needed to display, sell, offer test rides, or transport unregistered two-wheelers.
The article originally appeared on Mint
