To make matters worse for the electric two-wheeler manufacturer, the Securities and Exchange Board of India has cautioned Ola Electric against posting news about the firm on social media before telling investors about it.
According to the market regulator’s letter, which Ola Electric revealed, the company had not given investors “equal and timely access” to information about a planned retail expansion.
According to the newswire, Bhavish Aggarwal, the creator of the company, informed investors about the opening of new stores four hours later via stock exchanges and on the microblogging platform X. Companies that are publicly traded are required to notify investors of any new information through exchange filings as soon as possible, but no later than 12 hours after the event.
In an effort to broaden its customer base and respond to the growing number of concerns about service quality, Ola Electric, which went public in August of last year, opened 3200 new stores and service centers last month.
“The above violations have been viewed very seriously. You are hereby warned,” SEBI said in its letter.
After a government agency looked into the electric two-wheeler manufacturer’s service standards, this letter represents the most recent regulatory inspection of the company.
The consumer protection authorities has also been keeping an eye on the EV manufacturer. In October of last year, Ola Electrics received a show-cause notice from the Central Consumer Protection Authority (CCPA) for allegedly engaging in unfair trade practices, deceptive advertising, and violations of consumer rights.
The Karnataka High Court recently granted the EV maker relief by extending the deadline for submitting the information and documentation requested by the CCPA by six weeks.
The company released a statement saying, “We would like to notify 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.”