Ola Electric Issues Clarification After Report Says Company Under SEBI Lens

Bhavish Aggarwal-led Ola Electric has rejected a media report that claimed that markets regulator SEBI is probing the electric mobility startup over allegations of insider trading.

In an exchange filing, the EV maker termed the report factually inaccurate. “We would like to bring to your attention that the story titled ‘Ola Electric Likely In SEBI Crosshairs Over Alleged Insider Trading’ contains factual inaccuracies that could potentially harm the reputation of Ola Electric Mobility Limited,” the filing said. 

The report by NDTV Profit said that SEBI is looking into Ola Electric over two instances of alleged insider trading between October and December 2024.

The report alleged that Claudio Zizzo, vice president of Ola Electric’s electrical and electronics division, made at least two trades from privileged, material information during this period.

On November 26 last year, Aggarwal took to X to announce the launch of the Ola S1 Z and Gig series of escooters at 2:46 PM. “Say hello to Ola S1 Z & Gig range, starting at just ₹39K!” read the post. As per the report, Zizzo bought 62,205 shares of Ola Electric at INR 87.97 per share on the same day.

However, the company made regulatory disclosures about the product launches after the market closing hours that day. The report claimed that over the next three days, Zizzo sold all the shares he bought, and on November 27, Ola Electric shares hit the upper circuit.

Refuting allegations of insider trading, Ola Electric said the trades referred to in the media reports were “routine transactions involving shares acquired through exercising” employee stock ownership plans (ESOPs) and “not through the open market purchase.”

It is pertinent to mention that SEBI issued an administrative warning to Ola Electric in January for violating certain disclosure norms after founder Aggarwal announced material information about the company’s expansion plans on X before informing the bourses.

Ola Electric’s Regulatory Troubles 

The EV maker is currently under scrutiny of various departments for different reasons. Over the past few months, transport authorities have raided several Ola Electric showrooms across Maharashtra, Punjab and Madhya Pradesh and seized dozens of vehicles due to alleged compliance violations.

As per reports, Ola Electric was allegedly operating showrooms without necessary trade certificates. These certificates are mandated under India’s Motor Vehicles Act for dealerships to legally display, sell, or offer test drives of unregistered vehicles.

Ola Electric is also under fire from the heavy industries ministry for allegedly counting bookings of yet-to-be-delivered Roadster X electric motorcycles in February sales, in addition to Gen-3 escooters, deliveries for which began in March.

However, the company has claimed that the February sales numbers reflected genuine customer orders backed by full payments and not just bookings

Meanwhile, the EV maker said that the deliveries of the Roadster X ebikes have been delayed by a month. While the company previously said it would kick off deliveries of these vehicles in April, it now says it would commence deliveries in May.

SEBI has also launched a probe into Ola Electric over discrepancies in February sales data.

The EV maker is also being probed by the Central Consumer Protection Authority (CCPA) over allegations of delays in providing service and deliveries, defective vehicle sales, and other customer complaints.

Amid all these, Ola Electric saw registrations for its two-wheeler EVs tumble 16% to 19,709 units in April from 23,557 units in March. However, this was largely in line with the industry trend. Meanwhile, the company held a market share of 21% in April, lagging behind TVS Motor, which held a 21.5% market share.