SEBI issues warning to Ola Electric for violation of disclosure norms
The warning states that Ola Electric announced its expansion plans on social media before it was brought to the attention of the stock exchanges.
The Securities and Exchange Board of India (SEBI) on Wednesday issued a warning notice to electric vehicle maker Ola Electric for violating disclosure norms.
The warning states that the company’s Chairman and Managing Director, Bhavish Aggarwal, shared information about the company's store expansion plans on social media before notifying the stock exchanges.
On December 2, Aggarwal announced that Ola Electric intended to open 3,200 stores by December 20 as it aimed to increase its store count to 4,000 due to a decline in its market share. However, on December 19, the company postponed the opening of these stores to December 25.
According to SEBI guidelines, all listed entities are supposed to first disclose information and events to the stock exchanges or “as soon as reasonably possible”. The notice argued that Ola Electric had violated these norms.
The markets regulator said that the company failed to provide equal and timely access to information for all investors and has also failed to take into consideration the interest of all stakeholders.
Meanwhile, Ola Electric has been granted a six-week extension by the Karnataka High Court to submit additional documents and information requested by the Central Consumer Protection Authority (CCPA).
The development comes amid rising consumer complaints about the company’s electric scooters, particularly regarding its after-sales services. These complaints have been amplified by dissatisfied consumers voicing their frustration on social media, drawing attention to Ola Electric's customer service issues.
On October 7, the company received a show cause notice from CCPA seeking details of alleged violations of consumer rights, misleading advertisements, and unfair trade practices.
The company responded to this notice stating that it has resolved 99.1% out of the 10,644 complaints it received from the consumer watchdog.
However, on December 4, the CCPA sent another showcause notice to the EV manufacturer seeking additional documents and information concerning the company’s claims that it has resolved majority of complaints.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)