Ola Electric's unit faces 2 insolvency petitions over unpaid vendor dues

By Alisha Sachdev

 

A unit of Ola Electric Mobility Ltd. is facing insolvency petitions from two of its key vehicle registration service providers in India over unpaid dues, adding to the EV maker’s mounting troubles. 

Rosmerta Digital Services Pvt. and Rosmerta Safety Systems — suppliers of vehicle registration services and high-security registration plates respectively — have separately filed insolvency pleas against closely held Ola Electric Technologies Pvt., citing unpaid invoices, people familiar with the matter said.

 

Ola Electric Technologies is a wholly-owned subsidiary of Ola Electric Mobility and accounts for the bulk of the parent’s revenue.

 

Rosmerta Digital Services claims outstanding dues of just over Rs 22 crore ($2.5 million), while its sister company, Rosmerta Safety Systems, has sought nearly Rs 2.5 crore in payments, the people said. 

 

 

The maker of electric scooters — backed by SoftBank Group Corp. — informed stock exchanges late Saturday night that Rosmerta Digital Services had filed an insolvency plea against its subsidiary in the National Company Law Tribunal in Bengaluru, where Ola Electric is based. The company said it strongly disputes the claims and is seeking legal advice on the matter.

 

Rosmerta Digital Services and Rosmerta Safety Systems declined to comment. Ola Electric referred Bloomberg to the stock exchange filing when asked for a comment on the petitions against its unit.

 

The petitions come amid a shift in the way Ola Electric is handling vehicle registrations. Last month, the company said in a filing that it was “renegotiating” contracts with service providers, including Rosmerta Digital and Shimnit India Pvt. Founder and Chief Executive Officer Bhavish Aggarwal announced on X last week that the company was moving its registrations process “in house.”

 

The insolvency petitions against its unit add to a growing list of challenges for the company, which has struggled with regulatory scrutiny, customer complaints, and financial strain. 

 

A Bloomberg News investigation found that over 95 per cent of Ola’s 4,000 showrooms lacked the necessary approvals to display or sell unregistered vehicles. Transport authorities in multiple states have since conducted raids, shut down outlets, seized vehicles and issued notices to the company.

 

Ola Electric is also in the midst of a sweeping workforce reduction, Bloomberg reported earlier this month. Its shares have plunged more than 65 per cent from their peak since its IPO debut in August, reflecting broader investor concerns over its operational and regulatory hurdles.