Ola Electrical’s statutory auditors flagged ‘materials weak spot’ for in-physical verification of scooters at its shops and state distribution centres for one in all its wholly-owned subsidiaries
Its subsidiary Ola Electrical Applied sciences Pvt Ltd additionally confronted a “suspected fraud” in FY25, dedicated by its staff involving an quantity of over INR 1 Cr, the auditor remarked within the firm’s annual report
The corporate confronted public backlash over poor after-sales service, violations of regulatory norms, and discrepancies in month-to-month gross sales figures in the course of the fiscal yr
In Ola Electrical’s FY25 annual report, its statutory auditors flagged ‘materials weak spot’ for in-physical verification of scooters at its shops and state distribution centres for one in all its wholly-owned subsidiaries.
Within the fiscal yr, auditor BSR & Co. LLP Chartered Accountants famous that Ola Electrical didn’t perform bodily verification of electrical two wheelers (E2Ws) and spare components price INR 362 Cr positioned throughout a number of of its shops and state distribution centres.
“… [the] subsidiary firm didn’t have an acceptable inner management system for bodily verification of uncooked materials and completed items positioned at its shops and state distribution centres, which may probably end in materials misstatements within the group’s inventories, price of supplies consumed, and alter in inventories of completed items, stock-in-trade, and work-in-progress account balances,” the auditor report learn.
Additional, subsidiary Ola Electrical Applied sciences Pvt Ltd additionally confronted a “suspected fraud” in FY25, dedicated by its staff involving an quantity of over INR 1 Cr, the auditor remarked within the firm’s annual report.
Vital to say that the corporate confronted public backlash over the high quality of after service, flouting regulatory norms and mismatch of month-to-month gross sales numbers within the fiscal yr.
It was reported that not less than six Ola Electrical shops in Madhya Pradesh and 26 shops in Maharashtra had been raided by regional transport officers in mid-March.
Apart from, it additionally got here below the scanner of the Ministry of Heavy Industries (MHI) concerning discrepancies between reported gross sales figures and precise automobile registrations. Whereas the Vahan portal data 8,600 new Ola Electrical registrations in February, the corporate claimed to have offered 25,000 scooters.
The annual report revealed that Ola Electrical obtained e-mail communications from the NSE looking for details about the month-to-month gross sales discrepancy. “The corporate, vide its response dated March 26, 2025, and April 8, 2025, has supplied all of the requested info to the inventory exchanges which features a clarification stating that the press announcement of 25,000 items of autos offered was with respect to automobile bookings,” it added.
Ola Electrical clarified to the exchanges that it recognises income on the premise of supply of the scooter to the shoppers after completion of the registration course of.
Regardless of an incident free first quarter of the monetary yr (Q1 FY26), its fundamentals proceed to bleed. Whereas its web loss in Q1 FY26 additional fell 23% YoY to INR 347 Cr within the quarter, its working income dropped practically 50% YoY to INR 828 Cr.
Only a day in the past, its disclosures revealed that one in all its earliest backers, SoftBank Group, has offloaded over 2% stake within the firm over the previous two months. SoftBank’s stake in Ola Electrical now stands at 15.68%. Different early backers of the corporate, together with Z47 (previously Matrix Companions India) and Tiger International, additionally lowered their stakes between April and June this yr.
Shares of Ola Electrical closed at INR 59.91, down 7.25% on the BSE on Friday.
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