SEBI ‘warning’ letter on social media to Ola CEO Bhavish Aggarwal…

SEBI Criticizes Ola Electric for Breaking Disclosure Rules with a Social Media Post.

The Securities and Exchange Board of India (SEBI) has sent a warning to Ola Electric and its CEO, Bhavish Aggarwal, for breaking rules about sharing company information.

SEBI issued the warning on January 7, saying Ola announced its expansion plans on social media before informing the stock exchanges, which is against the rules.

The incident happened on December 2, 2024, when Aggarwal posted on X (formerly Twitter) about expanding Ola’s stores at 9:58 AM.

However, the company informed the Bombay Stock Exchange (BSE) hours later, at 1:36 PM. SEBI said this violated its regulations, which require all investors to have fair and timely access to information.

What SEBI Found:

SEBI pointed out four key violations:
• Delaying important updates to the stock exchanges.
• Giving some people an unfair advantage by sharing updates on social media first.
• Not focusing on investors’ interests.

SEBI called these violations “serious” and warned Ola to improve its practices or face strict action.

Ola’s Response:

Ola Electric said the warning does not affect its finances but promised to take corrective steps. The company must now:
1. Present SEBI’s warning to its Board of Directors.
2. Share its improvement plans with stock exchanges.

Other Challenges for Ola:

This isn’t the only issue Ola is facing. The company is also dealing with a case filed by the Central Consumer Protection Authority (CCPA). The Karnataka High Court has given Ola six weeks to respond to this case.

Lesson for Startups:

This incident shows the importance of following disclosure rules and prioritizing transparency. Startups and businesses must ensure all stakeholders are treated fairly when sharing information.