SEBI Warns Ola Electric For Violating Disclosure Norms

SUMMARY

SEBI noted that the EV maker’s founder and CEO Bhavish Aggarwal published the information about the planned expansion of store network nearly 4 hours before filing it with the exchanges

The regulator also directed Ola Electric to take corrective steps and warned of “enforcement action” if such cases re-occur

Meanwhile, the Karnataka HC rejected Ola Electric’s petition to quash a notice issued by the CCPA in connection with complaints of alleged violations of consumer rights

The Securities and Exchange Board of India (SEBI) has issued an administrative warning to two-wheeler electric vehicle (EV) maker Ola Electric for violating the former’s regulations.

Ola Electric is in the dock for announcing material information about a planned expansion of its store network on social media before informing the bourses first.

Under the existing rules, listed entities have to disclose all material information to the stock exchanges first and not later than “twelve hours from the occurrence of the event or information”.

As per Ola Electric’s filing with the exchanges, SEBI noted that the EV maker’s founder, chairman and managing director Bhavish Aggarwal published the information about the planned expansion nearly four hours before the company filed the said data with the bourses.

“It is observed that whereas the aforesaid information was disseminated on the stock exchanges by you at 1:36 PM (BSE) and 1:41 PM (NSE) on December 2, 2024, it was announced beforehand on X (formerly Twitter) at 9:58 AM on December 2, 2024 by Mr. Bhavish Aggarwal, your promoter and Chairman-cum-Managing Director,” SEBI said in its warning letter to the company.

The markets regulator also found the company guilty of failing to provide the information to all investors in an “equal and timely” manner. SEBI also observed that the listed EV maker “failed to take into consideration the interest” of all its stakeholders.

“You are therefore observed to have violated Regulations 4(1)(d), 4(1)f), 4(1)(h) and 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” the regulator said in its letter to the company.

While noting that it viewed the violations “very seriously”, SEBI “warned and advised” the company to be “careful in the future” and to improve its compliance standards to avoid recurrence of such instances. It also directed the company to take corrective steps and warned of “enforcement action” if such cases re-occur.

The development comes a week after the EV maker appointed Pritam Das Mohapatra as the new company secretary and compliance officer. He is responsible for overseeing Ola Electric’s regulatory compliance with existing governance framework and SEBI rules.

The warning came on the same day as the Karnataka High Court rejected Ola Electric’s petition to quash a notice issued by the Central Consumer Protection Authority (CCPA) in connection with complaints of alleged violations of consumer rights, misleading advertisements, and unfair practices.

While the CCPA notice required Ola Electric to submit additional documents, the HC granted some reprieve and provided the EV maker an extension of six weeks to respond to the show cause notice issued by the consumer protection watchdog.

Shares of Ola Electric closed Tuesday’s (December 7) trading session 1.54% higher at INR 79.16 on the BSE.