SEBI Directs Tata Motors To Probe Whatsapp Earnings Leak

SEBI asked Tata Motors to conduct an internal probe into the leak of its financial earnings on WhatsApp.

SEBI has asked Tata Motors Ltd to conduct an internal probe into the alleged leak of its financial earnings on WhatsApp.

(Photo courtesy: Reuters)

Markets regulator SEBI has asked Tata Motors Ltd to conduct an internal probe into the alleged leak of its financial earnings on WhatsApp ahead of the earnings being disclosed to stock exchanges and shareholders.

Tata Motors’ earnings for the quarter ended December 2015 were finalised before the circulation of the WhatsApp message on 11 February 2016, the Securities and Exchange Board of India said in an order on its website. The financial figures that the automaker reported during the quarter matched the figures that were in circulation prior to its official announcement, the regulator added.

The same could not have been possible without leakage of information from the person(s), who were privy to the information relating to financials prior to its official announcement.

SEBI orders on TATA Motors.

Tata Motors’ figures match with figures circulated on WhatsApp.(Photo courtesy: SEBI)

Tata Motors is the third company that SEBI has named in its probe related to the leakage of financial earnings on WhatsApp. Earlier, it issued similar orders to private lenders Axis Bank Ltd and HDFC Bank Ltd. Last year, a Reuters investigation had uncovered earnings leaks ahead of financial results on the instant messaging app and had identified at least 12 cases. SEBI conducted searches at the premises of more than 30 market analysts and dealers, seizing documents, computers, mobiles and laptops.

SEBI regulations bar any insider with “unpublished price-sensitive” information of a company or listed securities from communicating or providing it to any other person, including other insiders. Such information, according to the SEBI (Prohibition of Insider Trading) Regulations, 2015, cannot be shared unless in the case of a legal obligation or if it is disclosed in order to perform duties. SEBI chairman Ajay Tyagi had earlier said that there were six or seven blue-chip companies whose earnings were circulated on WhatsApp closer to the actual results.

Along with the internal inquiry report, SEBI has asked Tata Motors to submit a report on the present systems and controls in place and how they can be strengthened.

The regulator has ordered for such processes be strengthened to ensure that such leakages don’t happen again. It has also asked the company to mention the persons responsible for monitoring such systems.

The inquiry has to be wound up in three months, and Tata Motors will have to submit the report to SEBI within seven days of its completion.

(The story has been originally been published by Bloomberg Quint and has been republished with permission)

(Hey there, lady! What makes you laugh? Do you laugh at sexism, patriarchy, and misogyny? Do 'sanskaari' stereotypes crack you up? This Women's Day, join The Quint's Ab Laugh Naari campaign. Pick up that beer, say cheers, and send us photographs or videos of you laughing out loud at [e-mail].)