SUV maker Mahindra and Mahindra as wells as Hyundai Motor India have denied that any penalty has been levied or is being considered on the company over emission levels, and said that it does not see any material liability on the company.
Hyundai Motor India the talk of penalty or the quantum of penalty is 'more fictional than based on facts', and the company has not received any intimation in this regard.
Shares of M&M fell sharply by 3.35% the end of the trading session on November 28, after a report by The Indian Express said that eight car companies including Mahindra and Hyundai Motor India could face penalties totalling up to Rs 7,300 crore over 'higher than mandated' fleet emission levels for FY23.
The Indian Express report said that Hyundai faced the steepest penalty totalling over Rs 2,800 crore, followed by Mahindra at nearly Rs 1,800 crore. Read more about the news report here.
Any reference about a penalty on the company is 'factually incorrect', M&M said in a statement to stock exchanges later in the evening.
The assessment period for the Corporate Average Fuel Efficiency Norms II (CAFE Norms) for FY23 was between April 1, 2022 to March 31, 2023. However, M&M said, in December 2022, the Energy Conservation Act 2001 (EC Act) was amended to include a provision of penalty for vehicle manufacturers in case of non-compliance of CAFE Norms. The amendment clearly stated that the penalty provision is effective from January 1, 2023 only, M&M added.
The Bureau of Energy Efficiency (BEE) norms required car companies to achieve Corporate Average Fuel Efficiency (CAFE) for all of the units sold in FY23.
The application of amended penalty for the entire FY23 period would mean the penalty is being applied 'retrospectively, which is incorrect', Mahindra said, adding that the company does not see any material liability for FY23.
Mahindra added, "The Company has been transparently disclosing the receipt of any Orders imposing Penalty/ Fine on the Company to the Stock Exchanges and will continue to do so in compliance with the Listing Regulations."
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