Sebi warns Ola Electric over disclosure norms violation, its shares fall 4%

The company's MD had disclosed expansion plans on social media before information on stock exchanges

The Securities and Exchange Board of India (Sebi) has issued an administrative warning to EV maker Ola Electric Mobility over certain violations of disclosure norms.

 

The shares of Ola declined nearly three per cent to Rs 77 apiece on Wednesday.

 

The market regulator has pointed out that Bhavish Aggarwal, the company’s chairman-cum-managing director, announced expansion plans on social media platform X (formerly twitter) much before the formal disclosure to investors on the stock exchanges.

 

The company on December 2 had announced its plans for a four-fold expansion of the company-owned store network. 

The shares of the company had declined over 4 per cent intraday but recovered most of the losses and settled at around 79.54 on BSE with minor gains. 

 

 

Under the Listing Obligation and Disclosure Requirements (LODR) regulations, the listed company has to make such disclosures first on the stock exchanges.

 

In the warning letter dated January 7, the market regulator said that the company failed to inform the stock exchanges and all investors in a timely manner.

 

“Regulation 4(1)(h) of the LODR prescribes that ‘the listed entity shall make the specified disclosures and follow its obligations in letter and spirit taking into consideration the interest of all stakeholders’, by making the aforesaid announcement first on a social media platform instead of disseminating it on the stock exchanges, you have failed to take into consideration the interest of all your stakeholders and follow your obligations in letter and spirit,” notes the warning letter.

 

Sebi stated that the violations have been viewed seriously and advised the company to be careful in future to improve the compliance standards, failing which enforcement action may be initiated.