General Motors MD Karl Slym faces prospect of being 'interrogated' by authorities over alleged emissions data fraud. Unhappy with the information provided by General Motors India on the seven-year-long emissions data compliance fraud, the government on Friday decided to launch a fresh probe by a special investigation team (SIT).
Compared to the first probe by a three-member panel headed by NATRiP CEO Nitin Gokarn, the SIT will have increased powers to quiz former senior officials of the company, such as MD Karl Slym.
Senior government officials told FE that the SIT will be formed under the chief secretaries of the Maharashtra and Gujarat governments — GM has a plant each in the two states. The decision to launch the fresh probe was taken at an inter-ministerial meeting attended by officials from the ministries of law, finance, heavy industries and road transport on Friday.
“People who have left GM India need to be probed— their evidence is important because we need to know as to how the fraud originated. The Gokarn report has to be further investigated, since the information given by GM was not enough and all the evidence was not properly available such as who did it, who placed the vehicles, has anybody been left out or not,” an official who attended the meeting said.
“Unless we have all these, actual responsibility cannot be fixed. Since more investigation is required, the central government will request the chief secretaries to set up an SIT to investigate and take action,” the official added.
General Motors India did not reply to an emailed query on the issue.
GM had recalled 1.26 lakh units of the Tavera MPV in July this year and fired about 20 senior management officials after an internal audit found that the company had been fudging data on emission standards to meet compliance requirements between 2005 and 2011. The Gokarn probe panel earlier this month found the company guilty and said that the top management was completely aware.
Friday's inter-ministerial meeting has also decided to revise conformity of production procedures under official testing agencies such ARAI so that such frauds do not recur. Among the changes, the practice of 10-day intimation before ARAI officials come for a check at the carmaker's plants may be done away with. “We have to make sure that it is not easy for any company to do something like this in the future and get away with it,” said another official who attended the meeting.
Additionally, the ministry of heavy industries and the ministry of road transport have also set up a joint committee to monitor the recall exercise by GM so that consumers are not harassed, the official said. GM's Tavera recall is among the largest in the domestic industry till date.
For GM India, a company that is currently incurring losses, the penalty for the emissions fraud under the Central Motor Vehicle Rules is just about Rs 11 crore. However, the total cost of the fraud including lost sales for a month and the cost of fixing the recalled Taveras is expected to add up to Rs 500 crore.