Ola Electric Arm Faces Insolvency Plea Over ₹18-20 Cr Dues: Report
In a recent development, Ola Electric Technologies, a subsidiary of Ola Electric Mobility, is facing an insolvency plea over payment dues reportedly worth ₹18-20 crore. The operational creditor, Rosmerta Digital Services, has filed a petition at the National Company Law Tribunal’s Bengaluru Bench to initiate insolvency proceedings against the company.
Rosmerta Digital Services, a vehicle registration agency, has been unable to recover the outstanding amount from Ola Electric Technologies, leading it to take this legal action. The company’s plea seeks to recover the dues through insolvency proceedings, which could potentially lead to the sale of Ola Electric’s assets to pay off the creditors.
Ola Electric, in a filing, has disputed the claims made by Rosmerta Digital Services, stating that it “strongly disputes the claims made” and will take necessary legal action to defend its position. The company’s response indicates that it is not willing to back down without a fight, and the matter is likely to be taken up by the NCLT for further proceedings.
Insolvency proceedings, also known as corporate insolvency resolution process (CIRP), are a legal framework established by the Insolvency and Bankruptcy Code (IBC) to resolve the insolvency of corporate entities. The process provides for the appointment of an insolvency professional to manage the affairs of the company, and the resolution of the insolvency through a vote by the creditors.
The insolvency plea against Ola Electric Technologies is a significant development in the company’s financial struggles. Ola Electric, which is a subsidiary of the ride-hailing giant Ola, has been facing financial challenges in recent times. In 2020, the company had announced plans to raise funds to the tune of ₹1,400 crore to fuel its growth plans. However, it appears that the company may have run into financial difficulties, leading to the present situation.
The insolvency plea against Ola Electric Technologies is also significant in the context of the Indian electric vehicle (EV) market. Ola Electric is one of the leading players in the EV market, and its financial struggles could have a ripple effect on the overall industry. The company’s struggles could also impact the confidence of investors and consumers in the Indian EV market.
It is worth noting that Ola Electric Technologies is not the only Ola Electric Mobility subsidiary facing financial challenges. In 2020, the company’s another subsidiary, Ola Electric Mobility, had also faced financial difficulties and was forced to delay its plans to launch an electric scooter. The company had also reportedly laid off several employees as part of its cost-cutting measures.
The insolvency plea against Ola Electric Technologies is a reminder of the challenges that the Indian electric vehicle industry is facing. Despite the government’s efforts to promote the adoption of electric vehicles, the industry is still struggling to gain traction. The financial struggles of companies like Ola Electric Technologies could have a long-term impact on the industry’s growth prospects.
In conclusion, the insolvency plea against Ola Electric Technologies over ₹18-20 crore payment dues is a significant development in the company’s financial struggles. The company’s response to the plea, which disputes the claims made by Rosmerta Digital Services, indicates that it is not willing to back down without a fight. The outcome of the insolvency proceedings will be closely watched by the industry and investors, as it could have a significant impact on the Indian electric vehicle market.
