Ola Electric Shares Tumble 5% After Karnataka HC Refuses To Quash CCPA Notice

SUMMARY

Shares of Ola Electric nosedived 5% to INR 75.20 apiece on the BSE during the intraday trading today (January 8)

The decline in the stock's price came a day after the Karnataka High Court dismissed the electric mobility startup’s plea to set aside a notice issued by the Central Consumer Protection Authority (CCPA)

The issue dates back to October 2024 when CCPA issued show-cause notice to Ola over allegations of delays in providing service and deliveries, improper customer services, misbehaviour, defective vehicle sales, and a host of other customer complaints

Shares of Ola Electric nosedived 5% to INR 75.20 apiece on the BSE during the intraday trading today (January 8), a day after the Karnataka High Court dismissed the electric mobility startup’s plea to set aside a notice issued by the Central Consumer Protection Authority (CCPA).

The issue dates back to October 2024 when the consumer protection watchdog issued a show-cause notice to the Bhavish Aggarwal-led company over allegations of delays in providing service and deliveries, improper customer services, misbehaviour, defective vehicle sales, and a host of other customer complaints.

Consequently, the CCPA asked Ola Electric to submit additional documents as part of its probe against the company amid a barrage of consumer complaints.

On Tuesday, senior counsel representing Ola Electric reportedly argued before the Karnataka HC that asking the EV maker to produce required documents would trigger news that it is under investigation, which could harm its reputation.

However, the single-judge bench of Justice R Devdas observed that the investigative officer appointed by CCPA was well within its rights to issue a notice against Ola and that his actions were in the interest of consumers.

Justice Devdas rejected Ola’s petition to quash the issue, saying that Ola Electric was obligated to submit the necessary documents and that doing so would not be prejudicial to the firm.

This comes at a time when the electric vehicle maker has been dousing fires on multiple fronts. Recently, the company received an administrative warning from market regulator SEBI for violating certain norms. Ola Electric is in the dock for announcing material information about a planned expansion of its store network on social media before informing the bourses first.

Last month, it also saw top-level exits with its chief marketing officer (CMO) Anshul Khandelwal and chief technology and product officer (CTPO) Suvonil Chatterjee resigning with immediate effect.

December also saw Ola Electric losing its market leader position in the electric two-wheeler market in terms of escooter sales to legacy players Bajaj Auto and TVS Motor.

Ola Electric shares ended Wednesday’s trading session 0.48% higher at INR 79.54 apiece on the BSE.