Ola Electric gets one more show cause notice from CCPA over consumer rights violations; check details

Ola Electric Mobility Limited, led by Bhavish Aggarwal, disclosed that it has received a subsequent show cause notice from the Central Consumer Protection Authority (CCPA). The notice requested further documentation and details in addition to the company's previous response, in an exchange filing by the company stated on Thursday.

The CCPA has granted Ola Electric an extension of 15 days, beginning from the date of the email received on December 4, to furnish the requested particulars. Ola Electric has affirmed its commitment to adhere to the deadline and will furnish the requisite information within the stipulated timeframe.

"We would like to inform you that the Company has received further communication from the CCPA via email dated December 04, 2024, seeking additional documents and information in relation to the previous response submitted by the Company. The CCPA has provided a timeline of 15 days from the date of email communication for the Company to submit the response in respect of seeking additional documents and information. The Company will ensure a timely response within the specified timeframe," the company said.

On Thursday, Ola Electric’s shares closed at Rs 98.50 on the BSE, up by 0.11%.

In early October, Ola Electric was served with a show cause notice by the CCPA for purported breaches of consumer rights, deceptive advertising, and unjust business practices. The notice mandated the submission of supplementary documentation and details.

In October, Bhavish Aggarwal found himself in a contentious online discussion with comedian Kunal Kamra over service-related matters concerning Ola's e-scooters. Kamra raised concerns about extended wait times and unresolved complaints, highlighting a significant volume of complaints, reportedly reaching 80,000 each month. He questioned why the company was not taking more decisive action to address these issues.

In response, Aggarwal accused Kamra of being incentivized to tarnish Ola's reputation and challenged him to spend a day at an Ola service center. This counterargument resulted in a backlash, with social media users siding with Kamra and criticizing Aggarwal's dismissive demeanor.

On the business front, Aggarwal has recently committed to pledging a 1.1% stake in the electric two-wheeler manufacturer from his personal holdings to support his artificial intelligence startup, Krutrim AI.

Aggarwal has entered into a non-disposal agreement with Axis Trustee Services and Krutrim Data Centre to secure certain debentures issued by Krutrim, as revealed in a public disclosure by Ola Electric. A non-disposal agreement is a legal contract in which an individual or entity agrees not to sell or transfer specific assets for a specified period.

With a 30.02% stake (equivalent to over 1.32 billion shares) in Ola Electric, Aggarwal has pledged 48 million shares. Based on Ola Electric's closing share price of Rs 93.260 on Monday, the pledged shares are estimated to be valued at around Rs 450 crore.