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The Ministry of Road Transport and Highways (MoRTH) is open to initiating police enquiries against top management executives who headed General Motors India (GMI) between 2005 and 2012 in relation to the recall of 114,000 units of Tavera vehicle by the company earlier in July this year.
A government-instituted panel which probed the extent of non-compliance on part of General Motors in re-fitting pre-approved engines on Tavera models sent for inspection in order to meet specified emission norms, submitted its report late on Monday evening holding the company responsible for corporate fraud. The panel in its report has also said that top company executives including chief executive officers and managing directors who headed the company between 2005 and 2012 were involved and were in full knowledge of the violations.
“It is a proven case of corporate misdemeanor. The report was submitted late last evening. There will be financial penalty for the OEM, the amount of which is yet to be decided. But if the road transport ministry after reviewing the report thinks there is individual culpability as well, it can instruct the concerned state governments (Gujarat and Maharashtra) to initiate police investigations against senior leadership for fraud, cheating and personal gains”, said a top government official in know of the development. GM India may have to face penalty of up to Rs 11 crore under the Central Motor Vehicle Rules (CMVR) for misrepresenting emissions data to Automotive Research Association of India.
The company has had four leadership changes in the period of recall between 2005 and 2013. Aditya Vij led the company from August 2000 for about five years. He was replaced by Rajesh Chaba in 2005. Chaba held the mantle from June 2005, prior to Karl Slym assuming charge as managing director and president in October, 2007. Slym headed the company for four years till 2011, before moving on to join Tata Motors as MD. The company is now under the stewardship of Lowell Paddock in India. Sources said Paddock had told the probe panel that because of him the irregularities were unearthed.
A mail sent to Tata Motors seeking response with regards to the plan of action the company intends to take, a spokesperson replied, "Since we haven't seen the report, we cannot offer any comment on this".
General Motors globally is said to have dismissed more than 25 employees including Sam Winegarden, GM’s vice-president for global engine engineering and India CFO Anil Mehrotra. Rajesh Chaba too has been fired by GM.
In a statement, General Motors said, “We determined there was an emissions problem. We investigated it and identified violations of company policy. We developed a solution to the emissions problem and recalled the vehicles to serve our customers. We held people accountable. We advised the Indian authorities. Beyond that, we are not able to comment as we have not heard from the government or seen the report.”
Government officials conceded that during the investigation, the company has acknowledged to tempering of conformity of production (COP) processes and type approval of Tavera's BS-III and BS-IV variants. They added that once the company realized that their engines were not consistent in meeting emission norms, the pre-selected and tested engines were fitted to vehicles that were sent for testing by government agencies.
The three-member committee headed by Nitin Gokarn, chief executive officer, National Automotive Testing and R&D Infrastructure Project (Natrip) to probe the case, has recommended tightening of regulatory norms to prevent recurrence of such incidents.
The committee has said that the government should monitor recalls randomly to find out if the proper rectification is being done. It has also said that random check on samples from dealers, instead of manufacturing facilities should be done. The panel has additionally suggested that the notification of COP date should be fixed by the testing agencies and companies should have no role in this. At present, the date of picking up samples for testing is decided mutually by the testing agency and the manufacturer, resulting in the possibility of collusion. The committee has said that in case of non-compliance, the type approval should be withdrawn.
