Ola Electric is Warned by SEBI for Announcing its Network Expansion Plan on Social Media

Ola Electric, a manufacturer of two-wheeler electric vehicles (EVs), has received an administrative warning from the Securities and Exchange Board of India (SEBI) for breaking its rules. Ola Electric is facing charges for using social media to reveal important details about a planned shop network expansion before first alerting the stock exchanges. According to the current regulations, listed companies must notify stock exchanges of all material information as soon as possible, but no later than "twelve hours from the occurrence of the event or information." Bhavish Aggarwal, the founder, chairman, and managing director of the electric vehicle manufacturer, released the information about the planned expansion about four hours prior to the firm sharing the data with the exchanges, according to Ola Electric's filing with the exchange. In its warning letter to the company, SEBI noted that although the aforementioned information was released on the stock exchanges by Ola Electric at 1:36 PM (BSE) and 1:41 PM (NSE) on December 2, 2024, it was first announced on X (formerly Twitter) at 9:58 AM on the same day by Bhavish Aggarwal, the company's promoter and Chairman-cum-Managing Director.

Ola Electric Falling to Provide Information to all Investors

The company was also found guilty by the markets authority of not giving all investors the information in a way that was "equal and timely." The listed EV manufacturer "failed to take into consideration the interest" of all of its stakeholders, SEBI further noted. In its notice to the company, the regulator stated that Ola Electric had violated Regulations 4(1)(d), 4(1)(f), 4(1)(h), and 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. SEBI "warned and advised" the company to be "careful in the future" and to enhance its compliance standards to prevent recurrence of similar occurrences, while acknowledging that it took the violations "very seriously." Additionally, it warned of "enforcement action" should such incidents recur and instructed the corporation to take corrective action. This comes one week after Pritam Das Mohapatra was named the new compliance officer and corporate secretary by the EV manufacturer. He is in charge of monitoring Ola Electric's adherence to SEBI regulations and the current governance structure.

More Trouble for Ola Electric

The aforementioned warning was sent on the same day that the Karnataka High Court denied Ola Electric's request to have a notice from the Central Consumer Protection Authority (CCPA) on charges of unfair practices, deceptive advertising, and suspected violations of consumer rights revoked. The HC granted some mercy and gave the EV manufacturer a six-week postponement to reply to the consumer protection watchdog's show-cause notice, even though the CCPA notice demanded Ola Electric to submit new papers.

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StartupTalkyNitin Konde