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Ola Electric’s FY26 annual report disclosed another suspected employee fraud at its wholly owned subsidiary Ola Electric Technologies Pvt Ltd (OET), with auditors reporting two such offences involving more than ₹1 Cr. According to OET’s secretarial audit report, the statutory auditors reported the two suspected employee frauds to the central government through e-form ADT-4 filings dated July 9, 2025, and June 4, 2026. While one suspected fraud was disclosed in Ola Electric’s FY25 annual report, the filing made in June 2026 appears to relate to a second case. However, the latest annual report did not disclose the employees involved, the nature of the suspected frauds, or the precise amount involved in either case. It is also unclear whether the “amount exceeding ₹1 Cr” refers to each offence or the two cases collectively. Queries sent to Ola Electric remained unanswered at the time of publishing. The story will be updated upon receiving a response. Inventory Weakness Persists The disclosure comes amid continuing concerns around internal controls at Ola Electric. Its statutory auditors issued a qualified opinion on the group’s internal financial controls, citing a material weakness related to the physical verification of finished goods and raw materials at OET’s plant and stores. As of March 31, 2026, the group had ₹251 Cr worth of raw materials and finished goods covered by the audit matter. Of this, inventory worth ₹153 Cr had not been physically verified during FY26 or subsequently up to the date of the consolidated financial statements. The issue echoes FY25, when auditors had flagged a similar weakness involving ₹362 Cr worth of electric two-wheelers and spare parts that had not been physically verified at stores and state distribution centres. Ola Electric had attributed the FY25 lapse to a temporary realignment of inventory processes under Project Lakshya and said it had found no financial impact or inventory misplacement. The company similarly described the FY26 observation as an isolated case. It said a redesign of its network operations in Q4 FY26 temporarily disrupted inventory processes, preventing management from undertaking physical verification at the end of the year. However, Ola Electric said its ERP system did not show any discrepancy and that physical verification was conducted before and after the network redesign. The company appointed TRC Corporate Consulting as its external internal auditor after the end of FY26. During the fiscal year, Ola Electric relied on internal resources to monitor and review its controls and processes. Workforce Churn Surges Ola Electric also reported a sharp increase in employee turnover during FY26. The turnover rate among permanent employees rose to 60% from 54% in FY25, while that among permanent workers surged to 105% from 29%. The company attributed the higher rate primarily to increased attrition among permanent workers and said the vacant positions would be filled or appointments made afresh. The increase followed multiple rounds of job cuts at Ola Electric. The company reportedly cut around 500 jobs in 2024, followed by more than 1,000 layoffs in March 2025. In January 2026, Ola Electric announced another restructuring exercise that was expected to impact around 5% of its workforce as it increased automation across its front-end operations. The restructuring formed part of Ola Electric’s attempt to move away from rapid expansion and build a leaner operating model following a weak fiscal year. The company’s revenue from operations halved to ₹2,253 Cr in FY26 from ₹4,514 Cr in the previous fiscal year. Meanwhile, net loss narrowed 19.5% to ₹1,833 Cr from ₹2,276 Cr in FY25. The revenue decline came as Ola Electric’s deliveries fell to 1.74 Lakh units in FY26 from 3.59 Lakh units in FY25. During the year, the company also continued to face criticism over delivery timelines, after-sales service, and regulatory issues. Ola Electric called FY26 a “year of structural reset”, during which it rationalised its retail network, cut costs, strengthened service operations, and focused on improving unit economics. More recently, the company opened its sales and service network to dealer partners, marking a shift from its earlier company-owned retail model. It is targeting more than 500 dealerships over the next few quarters, while its company-owned outlets will transition into product experience centres. Ola Electric also raised ₹780.2 Cr through a QIP in June. Earlier this month, its board approved another fundraise of up to ₹1,500 Cr, subject to shareholder and regulatory approvals. Meanwhile, the company is expanding its battery cell business. It has “largely” completed the installation required for its 6 GWh cell manufacturing platform. In August, it launched the S1Z, its first escooter range powered by the company’s Bharat Cell LFP technology.
document fetched 2026-09-10 02:58 · canonical https://inc42.com/buzz/auditors-flag-second-suspected-employee-fraud-at-ola-electric-arm