SEBI warns Ola Electric over disclosure violations, seeks corrective action; stock tanks 5%

Markets regulator Securities and Exchange Board of India (SEBI) has, in a letter, warned electric vehicle (EV) manufacturer Ola Electric over disclosure violations, the company informed the exchanges on Wednesday, January 8.

The violation pertains to Ola CMD Bhavish Aggarwal's announcement on social media before an official filing was made with the stock exchanges. 

“The company (Ola Electric) has received an administrative warning via email on January 7, 2025, issued by SEBI through its letter dated January 7, 2025,” Ola's filing with the exchanges showed.

Following this development, Ola Electric share price tanked 5% to ₹75.20 on the BSE. At 12 pm, Ola Electric stock was trading at ₹77.13, down 2.56%.

What Was The SEBI Warning to Ola For?

According to the filing, SEBI issued an administrative warning to Ola in connection with violation of regulations 4 (1) (d), 4 (1) (f), 4 (1) (h) and 30 (6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These sections state that “channels disseminating information shall ensure equal, timely, and cost-efficient access to relevant information for all investors,” the filing added.

It added that the warning has no impact on the financial, operation or other activities of Ola Electric.

What Did The SEBI Warning Letter State?

The filing also included SEBI's warning letter to Ola, addressed to Aggarwal. The letter, in particular, pointed out the regulator took issue with Ola using Twitter to announce its corporate moves before publishing disclosures with the stock exchanges.

“This is with reference to your disclosure on the stock exchanges dated December 2, 2024 … wherein information regarding plans for a four-fold expansion of your company-owned store network by December 20, 2024 was disseminated. It is observed that the 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 Bhavish Aggarwal, your promoter and CMD,” it stated.

As per regulations, all disclosures must first be made to the stock exchanges within 12 hours of the occurrence or event. SEBI noted that this also violated stipulations that all investors be equally informed in a timely manner. 

“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 investors,” it added.

So What Next for Ola Electric?

In its warning letter, SEBI noted that the “violations have been viewed very seriously” and advised Ola to be “careful in the future and to improve your compliance standards to avoid recurrence.” It added that failure to comply would result in “appropriate enforcement action.”

Ola was also advised to “take corrective steps, place this communication and the corrective steps taken before your Board of Directors and disseminate a copy of this communication on the stock exchanges that you are listed on.”