After WhatsApp refused to share user data with Securities and Exchange Board of India (SEBI) on grounds of privacy, the market regulator has asked Tata Motors to conduct an investigation into the leak of its earning figures and key financial information on the Facebook-owned instant messaging app.
As per reports, SEBI has instructed the Mumbai-headquartered automotive company to perform a thorough inquiry as to how the leak was perpetrated on social media.
The latest development comes more than three months after price-sensitive financial details of over 24 companies were leaked ahead of their earnings announcement on WhatsApp and other social media platforms.
The matter surfaced when a Reuters report identified 12 companies whose second-quarter earnings were being circulated in private WhatsApp groups. Nearly half of these companies were part of Nifty 50.
The companies under scanner included Dr. Reddy’s, Cipla, Axis Bank, HDFC Bank, Tata Steel, Wipro, Bajaj Finance, Mahindra Holidays and Resorts, Crompton Greaves Consumer Electricals Ltd, Mindtree Ltd, Mastek Ltd, and India Glycols, among others.
Soon afterwards, SEBI wrote to BSE and NSE, asking them to beef up their surveillance of other social media platforms such as Facebook, LinkedIn to see if any of these were being used for leaking earnings price-sensitive information.
Tata Motors To Now Look Into The Leak
Instructing Tata Motors to strengthen its internal processes, SEBI has directed it to look into the role of the people within the company who had direct access to this information as well as those who were responsible for preparing presentations and board notes.
Additionally, the regulator has said that Tata Motors to investigate the involvement of those who were tasked with consolidating and disseminating data related to the auto company’s financial results.
As stated by SEBI, preliminary examination of the matter revealed that the leaked information almost matched Tata Motors’ earnings report for the quarter ending in December 2015. This essentially means that the information was likely in circulation in different WhatsApp groups even before the official announcement.
In response to SEBI’s directives, a spokesperson for Tata Motors commented, “Tata Motors would like to state that it is fully committed to ensuring confidentiality of such price sensitive information. This lapse pertains to an incident in 2015. While the company has robust policies and processes to manage such price sensitive information, we will investigate this lapse thoroughly to identify and address process gaps and fix accountability.”
WhatsApp Not In The Clear Yet
Interestingly, this isn’t the first time that WhatsApp’s privacy credentials have been brought into question. In September 2017, a five-member bench of the Supreme Court of India ordered Facebook and Whatsapp to file sworn declarations as to whether they have partaken in any kind of data sharing activities with third-party entities.
Both WhatsApp and Facebook, however, denied such allegations, stating that neither companies have shared any data with foreign entities.
While the instant messaging platform is currently running a pilot of its digital payments feature in India, it has already been locked in a war of sorts with Paytm, with the latter claiming that WhatsApp has been trying to enter the country’s digital payments market through unfair means by flouting NPCI rules on UPI and deliberately restricting the service to its own 200 Mn users.
With WhatsApp refusing to share user-specific information with SEBI, the market regulator has no choice but to turn to other options. Whether the probe by Tata Motors will help uncover how the leak was actually perpetrated remains to be seen.
(The development was reported by ET)