MG Motor India faces probe for alleged invoicing fraud, management summoned
At the same time, MG Motor said that it is impossible for any automobile company to be profitable in the very first year of its operations.
- Nov 1, 2022,
- Updated Nov 1, 2022 4:35 PM IST
The Ministry of Corporate Affairs (MCA) is probing carmaker MG Motor India for certain alleged audit deficiencies and invoicing fraud, sources told Business Today TV. MG Motor India is a subsidiary of Chinese automotive manufacturer SAIC Motor.
The ministry has served a notice to MG Motors on certain losses reported in its books of account, the sources said. It has also summoned the management, including MG Motor India President and Managing Director Rajeev Chaba.
The Registrar of Companies, Delhi (RoC Delhi) has summoned the management of MG Motors, and auditor Deloitte on certain alleged audit deficiencies unearthed during the probe.
Speaking on the development, MG Motor told Business Today TV that it has been sent a notice seeking clarifications primarily on why the company has operational losses basis its annual report for the first year of operations 2019-2020.
The carmaker said that it is a law-abiding, professionally managed company that adheres to the highest standards of compliance and governance and is committed to transparency. "We fully cooperate with the Government authorities on all issues and are in process of providing the desired records and information to the Registrar of Companies within the stipulated time frame," it added.
At the same time, MG Motor said that it is impossible for any automobile company to be profitable in the very first year of its operations. "This is because of the huge Capex investment required and the long gestation period in a highly competitive market such as India where many multinationals have struggled for decades and have accumulated losses. We are a global multinational, and our books are maintained as per Indian accounting standards and audited by reputed audit firms," it added.
The Ministry of Corporate Affairs (MCA) is probing carmaker MG Motor India for certain alleged audit deficiencies and invoicing fraud, sources told Business Today TV. MG Motor India is a subsidiary of Chinese automotive manufacturer SAIC Motor.
The ministry has served a notice to MG Motors on certain losses reported in its books of account, the sources said. It has also summoned the management, including MG Motor India President and Managing Director Rajeev Chaba.
The Registrar of Companies, Delhi (RoC Delhi) has summoned the management of MG Motors, and auditor Deloitte on certain alleged audit deficiencies unearthed during the probe.
Speaking on the development, MG Motor told Business Today TV that it has been sent a notice seeking clarifications primarily on why the company has operational losses basis its annual report for the first year of operations 2019-2020.
The carmaker said that it is a law-abiding, professionally managed company that adheres to the highest standards of compliance and governance and is committed to transparency. "We fully cooperate with the Government authorities on all issues and are in process of providing the desired records and information to the Registrar of Companies within the stipulated time frame," it added.
At the same time, MG Motor said that it is impossible for any automobile company to be profitable in the very first year of its operations. "This is because of the huge Capex investment required and the long gestation period in a highly competitive market such as India where many multinationals have struggled for decades and have accumulated losses. We are a global multinational, and our books are maintained as per Indian accounting standards and audited by reputed audit firms," it added.