Ola Electric’s journey toward its highly anticipated initial public offering (IPO) has hit a roadblock as its promoter entity, ANI Technologies, faces investigation by the Enforcement Directorate (ED) in connection with a copyright infringement case involving music company Lahari. The development unfolded as revealed in the draft red herring prospectus (DRHP) filed by Ola Electric with the market regulator SEBI.
The Copyright Infringement Saga:
According to information disclosed in the DRHP, Lahari filed an FIR against ANI Technologies and former Ola cofounder Ankit Bhatti in connection with playing songs on the ‘Ola Play’ devices without a valid license. Despite the initial legal dispute, the two parties reached an agreement in August 2022 to settle the matter. Subsequently, ANI Technologies filed an application and a petition with the Karnataka High Court to quash the FIR, which is currently pending.
ED Summons and Ongoing Compliance:
In early December 2023, the ED issued summons to ANI Technologies under the Prevention of Money Laundering Act, 2002, seeking information and documents related to copyright licenses owned by ANI. The agency also sought details about the settlement with Lahari. ANI Technologies responded to the ED’s queries on December 13 and is currently in the process of furnishing additional information.
Consumer Grievances and Legal Challenges:
Apart from the ED scrutiny, Ola Electric is facing 169 consumer grievance cases, covering issues such as non-delivery of electric vehicles (EVs), defective deliveries, order cancellations, and improper servicing. Users have collectively sought damages amounting to INR 4.47 Crore from the EV manufacturer.
Additional Legal Challenges:
The DRHP also revealed that Krishnamurthy Venugopala Tenneti, Ola Electric’s non-executive director, is facing allegations of dishonoring cheques totaling INR 1.04 Crore in his capacity as a non-executive director of another company.
IPO on the Horizon:
Despite these challenges, Ola Electric is moving forward with its IPO plans, which include a fresh issue of INR 5,500 Crore and an offer-for-sale (OFS) component of 9.51 Crore shares. Founder and CEO Bhavish Aggarwal, along with major investors such as SoftBank, Tiger Global, and Alpha Wave Ventures, is set to participate in the OFS.
