SEBI warns Ola Electric on breach of disclosure norms: Report

The Securities and Exchange Board of India has warned Ola Electric against sharing company related news on social media prior to disclosing it to investors, adding to the woes of the electric two wheeler maker. 

The letter from the market regulator, disclosed by Ola Electric late on Thursday, stated that the firm had failed to provide "equal and timely access" to investors regarding a planned store expansion. 

On December 2, the company's founder Bhavish Aggarwal shared news about new store openings on the micro blogging site X, and to investors, four hours after that, via stock exchanges, the newswire noted. Publicly listed firms are mandated to disclose any information first to investors via exchange filings, and not more than 12 hours after the event takes place. 

Ola Electric, which listed in August last year, opened 3200 new stores and service centres the previous month to expand reach and address increasing complaints pertaining to service standards.

"The above violations have been viewed very seriously. You are hereby warned," SEBI said in its letter.

This letter marks the latest regulatory scrutiny on the electric two-wheeler maker, following a government agency's investigation into its service standards.

The EV maker has also been on the radar of the consumer protection authority. The Central Consumer Protection Authority (CCPA) had issued a show cause notice to Ola Electrics in October last year for alleged violation of consumer rights, misleading advertisement and unfair trade practices. 

Recently, the Karnataka High Court has given relief to the EV maker by giving an additional six weeks' time to submit documents and information sought by CCPA. 

“We wish to inform you that the Hon’ble Karnataka High Court has granted an extension of six weeks for the Company to submit the response in respect of seeking additional documents and information by the CCPA,” the company said in a statement on January 7.