New Delhi: The government may take “punitive action” against two former managing directors (MDs) of General Motors India Pvt. Ltd(GM), including Karl Slym, current chief executive officer (CEO) and MD of Tata Motors Ltd, if they are found guilty of violations that led the American car maker to recall its ChevroletTavera multi-utility vehicles in July, two top government officials said on Tuesday.
On Tuesday, The Times of India and Hindustan Times reported that a government panel formed to investigate the recall had held the company responsible for committing “corporate fraud” and said its top management—including CEOs and MDs—from 2005 to 2011-12 were involved.
The committee was set up to probe if the auto maker had a role in violating engine testing norms after it issued in July what was then India’s largest recall (114,000 vehicles) for flouting the compliance of production (COP) norms. The company informed the Indian authorities of an emissions issue involving the Tavera.
Under COP, companies have to produce vehicles and components that exactly match the specification, performance and marking requirements approved by the testing agencies.
A top official from ministry of road transport and highways (MoRTH) said the probe panel has been “seeking views of the former managing directors” of the Indian unit of the American auto maker.
“Email exchanges have happened between ex-MDs and the probe panel.” this official said. “Their views were sought. We are examining the panel report and evidences collected.”
When asked whether—if it finds the executives guilty—the government will take action against them, the official said: “Of course, they can be penalized if they are found guilty. We should be able to come out with our recommendations in a week’s time.”
Another government official from a different ministry also confirmed the development.
“They will be asked to furnish details about what happened during their stay at the company. We can’t be talking about repercussions of that at the moment. If at all this happens, it will happen on behalf of MoRTH,” the official said, requesting not to be named. The official declined to name the two GM executives.
In chronological order, the last two MDs of the firm were Slym and Rajiv Chaba.
Tata Motors did not respond to an emailed questionaire.
Chaba, who was GM’s managing director between 2005 and 2007, said: “I have not been contacted on this issue by the government.”
Chaba was one of the 20 executives who was asked to leave after the emissions issue resurfaced.
A General MotorsIndia spokesperson said the company had not heard from the government or seen the panel’s report.
In a statement, P. Balendran, vice-president of General Motors India, said it had determined there was an emissions problem in its vehicles and had investigated and identified violations of company policy. The company had then recalled the vehicles and held people accountable, Balendran said, without giving details.
Mint on 26 July first reported that as many as 20 senior executives of General Motors had been sacked over the issue.
The probe panel, headed by Nitin Gokarn, CEO of the National Automotive Testing and R&D Infrastructure Project, involved with testing, validation and research and development (R&D), has given a clean chit to the testing agency—the Indian Automotive Research Association of India.
The first government official quoted in the story said views of ministry of road transport and highways and ministry of heavy industries will be “harmonized” before further action is taken.
“We have taken this fault very seriously. Whether it is a civil liability or a criminal liability will be decided later,” this official said. “Firstly, it’s a fraud on consumers and violation of CMVR (Central Motor Vehicle Rules).”
The second government official said it was clear that General Motors had been at fault.
“The issue is spread over so many months and it has chucked out 20 senior executives. This points out many senior executives were involved,” this official said.
“We will take first punitive action and then corrective action after examining the report we received last evening,” said the first official.
Mint had first reported on 11 June that General Motors India had asked its dealers to stop selling the Tavera. The company informed the government of an emissions issue involving the Tavera BS3 and an issue with the Tavera BS4 with regard to meeting certain specifications. It stopped production and sale of the Tavera BS3 on 4 June and the Tavera BS4 on 2 July.
S.P. Singh, a senior fellow at Indian Foundation of Transport Research and Training, a Delhi-based independent research firm, said: “We have all along maintained that the top management of GM India was fully involved in the fudging of type approvals and COP norms... We want all the 1.14 lakh Tavera vehicles to be withdrawn and the vehicle owner fully compensated. Repair of the vehicle will not ensure its legality as these have been sold and registered with the RTO (Regional Transport Office) based on false information.”