Rosmerta Digital Services Ltd has filed an insolvency petition against Ola Electric Mobility’s subsidiary — Ola Electric Technologies before the National Company Law Tribunal (NCLT), alleging that the electric two-wheeler maker has defaulted on payments for the services provided. The insolvency petition has been filed at a time when Ola Electric’s vehicle registration process transformation is in its final stages.
- Ola Electric receives a petition under Section 9 of IBC
- Ola defaults payment of services provided by Rosmerta
- The Insolvency plea has been filed before the NCLT- Bengaluru
Rosmerta files a petition against Ola Electric technologies
Ola Electric informed in a stock exchange filing that a petition has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) by M/s. Rosmerta Digital Services Ltd, an operational creditor of Ola Electric Technologies Pvt Ltd— a wholly owned subsidiary of Ola Electric Mobility Ltd.
“The petition has been submitted before the NCLT – Bengaluru Bench, alleging to default in payment towards the services rendered by the Operational Creditor and seeking initiation of the Corporate Insolvency Resolution Process against the Ola Electric Technologies,” Ola Electric said
What does section 9 of Insolvency and Bankruptcy code mean?
Section 9 of the Insolvency and Bankruptcy code interprets that after the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.
This comes shortly after Ola electric last week had reported that it had successfully implemented the Network Transformation and Opex (operational expense) reduction program, a company-wide initiative launched in November 2024 to reduce costs and improve customer experience. This initiative has resulted in a sustainable cost reduction of Rs 90 crores per month and could help its automotive division achieve EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) breakeven in the first quarter of the next financial year.
About Rosmerta Digital
Rosmerta Digital is a subsidiary of Rosmerta Technologies Ltd that provides digitally-enabled services and digitally-enabled channel sales of vehicles, components and accessories. The company approached the NCLT a couple of weeks after Ola Electric said it was renegotiating terms with Rosmerta Digital and Shimnit India to reduce cost and enhance registration process efficiencies.
Rosmerta’s dispute arises as Ola electric is already facing a probe by the Central Consumer Protection Authority (CCPA) where the Authority has sought additional documents for over ten thousand on-going pending consumer cases against the company and its products.
The automaker said it is strongly disputing the claims made by Rosmerta Digital in the insolvency petition and has sought appropriate legal advice.
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