Central Bureau of Investigation (CBI) has booked former Maruti Udyog (now
Maruti Suzuki) Managing Director and founder of Carnation Auto (the company was recently sold to Mahindra First
Choice Services) Jagdish Khattar for alleged criminal conspiracy and
misconduct and for cheating Punjab National Bank on loans amounting to Rs 110
has , however, denied fraud of any nature. “Carnation was a board managed
company with the highest ethical standards and best management practices. Some
of the most reputed investors in the country including Premji Invest and Gaja
Capital were board members who, in their own interest, kept a tight vigil on
its operations and finances. Each financial decision was based on comprehensive
business plans and approvals. The company was finally sold to Mahindra Group.
its failure as a business, an exhaustive and detailed independent forensic
audit at the behest of the bankers under the resolution professional was
conducted by a leading independent auditor and nothing was found amiss. Having
found no lapses in operations or financial management the Bank has referred the
matter to CBI as a part of the process followed by them. The company has not indulged
in any wrongdoing. A search was conducted by CBI but nothing incriminating was
found,” a statement by Khattar said.
Khattar further noted that Carnation Auto was a first mover to create an open
multi-brand auto solutions platform for customers whose cars were outside
warranty period and who felt pinched by high maintenance costs. It
unfortunately became a bonafide business failure on account of many reasons including cartelization by auto
majors by non-supply of genuine parts, he pointed out.
was in Dec 2018 that Mahindra First Choice Services (MFC Services) had entered
into an asset acquisition agreement with the official liquidator of Carnation
Auto (India) Pvt. Ltd. (CAPL). As a result, MFC Services acquired key assets of
Carnation’s car-servicing business including the trademark ‘Carnation’, its
website, software licenses and Carnation’s workshop network.
Carnation Auto was started by Jagdish Khattar,
the erstwhile Managing Director of Maruti Udyog Ltd (now Maruti Suzuki). The
company aimed to develop India's largest independent multi-brand automobile
sales and service network. Carnation Auto raised its first round of funding of
Rs 108 crore from Premji Invest and IFCI Ventures. It also received a loan of
Rs 170 crore from Punjab National Bank for executing the nation-wide rollout of
its multi-brand auto solution hubs.
despite the best of Khattar and his son Kunal Khattar, the company failed to
turn around and slipped into massive losses. Khattar and his team were then
left with no option but to liquidate his company.
MAHINDRA FIRST CHOICE SERVICES BUYS KEY
ASSETS OF CARNATION AUTO
CBI FIR alleged that Jagdish Khattar along with “unknown public servants”
cheated PNB of the amount and that he had failed to repay his debt.