Ola Electric said it has successfully resolved the financial dispute between one of its subsidiaries and the Rosmerta Group, leading to the withdrawal of insolvency proceedings that had been initiated against Ola Electric Technologies Pvt Ltd.
According to a media statement released by Ola Electric, the company has "amicably settled all outstanding dues" between its wholly owned subsidiary and the Rosmerta Group.
Rosmerta said it received Rs 26.75 crore under the settlement.
Following this, Rosmerta has filed a memo for withdrawal of petitions previously submitted to the National Company Law Tribunal (NCLT) in Bengaluru.
"The matter now stands fully resolved. Ola Electric remains committed to fulfilling its obligations and maintaining professional relationships with all stakeholders," the statement read.
Background of the Dispute
The settlement comes after Rosmerta had previously filed an insolvency plea against Ola Electric Technologies, a subsidiary of the electric vehicle manufacturer. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) over alleged payment defaults.
Rosmerta Group, which specializes in automotive security products, registration plates, and other automotive components, had claimed that Ola Electric Technologies had defaulted on payments for goods supplied. The exact amount of the outstanding dues has not been disclosed in the current settlement announcement.
This resolution follows a period of intense negative scrutiny and controversy for Ola Electric.
The company came under fire from industry watchers and consumers when reports emerged about a significant gap between vehicle sales and registrations. The company refuted these claims, explaining that the discrepancy was due to a "temporary vendor backlog" in the production of registration plates.
Ola Electric had clarified that this was not indicative of any financial difficulties but rather stemmed from supply chain issues with vendors, including Rosmerta Group, which is a key supplier for High Security Registration Plates (HSRP).
The controversy was also accompanied by a flurry of other allegations, including media reports that Ola was facing regulatory trouble from municipal authorities for failing to secure proper certificates for a few of its hundreds of Ola showrooms.
Ola Electric, led by the rather colourful Bhavish Aggarwal, hit back recently, alleging that there was an orchestrated campaign by some media houses and vested interests to portray the company in a bad light.