MG Motor India on Tuesday said that it is a law-abiding, professionally-managed company that adheres to the highest standards of compliance and governance and is committed to transparency in the country, as reports surfaced that the government has launched a probe into Chinese SAIC-owned MG Motor’s accounts amid scrutiny of Chinese companies.
According to Bloomberg, “the probe against the local unit of the Chinese carmaker SAIC Motor has been initiated by India’s Ministry of Corporate Affairs”.
“The company’s top management, including directors, managing director and auditors have been summoneda by the ministry seeking more clarification, the people said,” according to the report.
In a statement, the automaker said that they have been sent a notice seeking clarifications primarily on “why we have operational losses on basis of our annual report for the first year of operations 2019-2020”.
“We fully cooperate with the government authorities on all issues and are in process of providing the desired records and information to the Registrar of Companies within the stipulated time frame,” said MG Motor India.
At the same time, “we would also like to state that it is impossible for any automobile company to be profitable in the very first year of its operations. This is because of the huge capex investment required and the long gestation period in a highly competitive market such as India where many multinationals have struggled for decades and have accumulated losses”, the company elaborated.
The automaker recorded its highest-ever output of 5,008 units, including 1,000 electric vehicles (EVs), in the month of October.
“We are a global multinational, and our books are maintained as per Indian accounting standards and audited by reputed audit firms,” said the company.
Last month, MG Motor India and its consortium members launched the fourth edition of its Developer Programme and Grant (MGDP) to accelerate, mentor and incubate innovative Indian startups in the field of electric mobility, as the country aims to obtain 50 per cent of its installed electricity capacity from non-fossil sources by 2030.