Ola Electric shares crash 5% as SEBI issues administrative warning
What's the story
The Securities and Exchange Board of India (SEBI) has issued an administrative warning to Ola Electric Mobility for violating disclosure norms.
The company received the letter on January 7, according to its communication with the exchanges.
The violation relates to the premature announcement of expansion plans on X (formerly Twitter), by CEO Bhavish Aggarwal, before officially informing the exchanges.
Following the warning, shares of Ola Electric crashed 5% to hit a low of ₹75.36 on Sensex today.
Violation details
SEBI's warning letter details Ola Electric's disclosure violation
SEBI's warning letter specifically mentions Aggarwal's December 20, 2024, announcement regarding a four-fold expansion plan.
The CEO had written on X, "Taking the Electric revolution to the next level this month. Going from 800 stores right now to 4,000 stores this month itself."
However, it was only on December 25 that the expansion was officially communicated, prompting SEBI to issue the warning for violating information dissemination regulations.
Regulatory breach
SEBI cites specific regulations violated by Ola Electric
The warning letter from SEBI notes that Ola Electric contravened regulations 4(1)(d), 4(1)(f), 4(1)(h) and 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
These regulations relate to providing equal, timely, and cost-efficient access to relevant information to all investors.
"By failing to first disseminate the information on the stock exchanges and instead announcing it on a social media platform, you have failed to provide equal and timely access to information for all," the market regulator noted.
Compliance warning
SEBI warns Ola Electric to improve compliance standards
SEBI's letter also pointed out that the news of the expansion was disseminated on stock exchanges at 1:36 pm (BSE) and 1:41 pm (NSE) on December 2, but had already been announced by Aggarwal on X (formerly Twitter) at 9:58 am that day.
The regulator cautioned Ola Electric to be careful in future and improve its compliance standards to avoid such cases, or risk enforcement action under the Securities and Exchange Board of India Act, 1992.