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GM emissions scandal: Govt to check if other car makers also fudged data

GM has reportedly fired around 20 officials,including five members of the senior management.

Written by Roudra Bhattacharya | New Delhi | Published: July 27, 2013 3:18:29 am

The government is exploring if other car makers also fudged data and colluded with official agencies in order to comply with emissions norms,in an expansion of the probe which started with General Motors’ (GM) India unit recalling 1.14 lakh units of the Tavera MPV earlier this week. GM has reportedly fired around 20 officials,including five members of the senior management,after an internal audit discovered the lapses in compliance.

Sanjay Bandopadhyaya,joint secretary (transport),ministry of road transport and highways told FE that a “maximum penalty” of around R11 crore would be levied on GM if a government panel appointed to investigate the matter finds it guilty. The panel,headed by Nitin Gokarn,CEO of the National Automotive Testing and R&D Infrastructure Project (NATRiP),is expected to submit its report in about a month’s time.

“We are already in dialogue with ARAI and have told them that they should also check with other companies. We have to see to what extent the company,which has been incorporated long back,defaulted under the provisions of CMVR (Central Motor Vehicle Rules). We will go for the maximum penalty,which is R500 for the first car and R1,000 for the rest,” he said.

Commenting on the possibilities of collusion with the government testing agencies,such as Automotive Research Association of India (ARAI),he said,“We are not saying no to anything. It will be considered. We have also ordered to fix the responsibilities,because people (buyers) would like to know about it since over a lakh vehicles have been recalled.”

Lowell Paddock,president and MD at GM India,said,“Our internal investigation has uncovered no evidence of any collusion with government agencies.” Paddock added that the company is not yet aware of any penalties that the government may impose.

Among the senior officials fired by GM after the discovery of the scandal was an ex-CFO and a current R&D head based out of Bangalore. While industry sources indicated that other officials who have since left the company may be questioned,Bandopadhyaya said that the government is largely interested in fixing responsibility with the company. “Anybody can be called in for investigation purposes. In order to know to what extent violations have been committed,evidence has to be collected But we are not looking at the management,for us it’s the company; management is their issue,” he said.

Added a senior official from the heavy industries ministry,the nodal ministry for the auto industry and responsible for NATRiP,“We have to see if there was human error,and if proper processes were followed. We will see if there is a human malafide wrongdoing or if it was a systemic failure. The company can be penalised and may be asked to shut production until the government is sure that it meets all regulations.”

RC Bhargava,chairman at India’s largest car maker Maruti Suzuki,said that rules need to be changed so that fudging is tough and there need to be more random checks at the production line by government agencies. “If you make rules making it easy for people to fudge,then don’t be surprised. Some rules are framed in such a manner that it encourages such behaviour,like the fuel efficiency test earlier. What has happened at GM is an aberration,may be by some overzealous officials. I don’t think it’s the norm.”

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