SEBI warns Ola Electric on disclosure norms violations
MUMBAI: The markets regulator SEBI has issued an administrative warning to electric two-wheeler maker Ola Electric Mobility for violating disclosure norms. The company went public last August in a successful initial share sale raising Rs 6,145.56 crore but since then has been losing its market share badly, which went to Bajaj and TVS.
Following the news Ola Electric shares tanked 4 per cent to Rs 76.14 but later recovered and closed flat at Rs 79.54.
The SEBI warning came Wednesday after Bhavish Aggarwal, the chairman and managing director of the firm, had on December 2, 2024 shared details of Ola’s plans for a four-fold expansion of its retail points on a social media platform, and not after disclosing to the exchanges.
However, the regulator observed that the aforesaid information was not first disclosed to the exchanges and the disclosure was not made on the stock exchanges as soon as reasonably possible.
"By making the aforesaid announcement first on a social media platform instead of disseminating it on the exchanges, Ola Electric failed to take into consideration the interest of all its stakeholders and follow its obligations in letter and spirit," SEBI said.
"Taking the electric revolution to the next level this month. Going from 800 stores right now to 4,000 stores this month itself. Goal to be as close to our customers as possible. All stores open together on December 20. Probably the biggest single day store opening," Aggarwal wrote on X.
He shared the post at 9:58 am on December 2, 2024. However, SEBI noted that the information was disseminated on the exchanges only at 1:36 pm to BSE and 1:41 pm to NSE on December 2.
"The above violations have been viewed very seriously. You are hereby warned and advised to be careful in the future and to improve your compliance standards to avoid recurrence of such instances, failing which appropriate enforcement action may be initiated," the SEBI further stated.
"You are also advised to take corrective steps, place this communication and the corrective steps taken before your board and disseminate a copy of this communication on the exchanges," SEBI said.
The regulator has pointed out that under the listing obligations and disclosure requirements (LODR) regulations, a listed company has to make such disclosures first on the stock exchanges. But Ola failed to inform the exchanges on time and all investors promptly.
“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.