Zomato Investors’ complaint to Sebi over the delayed Blinkit disclosure
- ByStartupStory | July 4, 2022
Sources with intimate knowledge of the situation claim that a group of high-net-worth investors from Mumbai have complained to the Securities and Exchange Board of India (Sebi) about meal delivery company Zomato’s failure to timely disclose its acquisition of Blinkit to the stock markets. On June 24, Zomato notified the stock exchanges that its board had authorised the purchase of Blinkit for Rs 4,447 crore. The investors claimed that the delay had cost them money and that prompt disclosure would have given them more time to prepare.
The investors claimed in a letter dated June 29 to the chairman of the Sebi that information regarding the prospective acquisition had circulated on social media for more than a month prior to the announcement. However, they said that Zomato had not acknowledged nor rejected the reports. Since the news of the deal on June 24 after market hours, Zomato shares have dropped by 20%.
Following the board’s approval of the deal and the signing of the final agreements, Zomato stated that it had complied with all applicable laws and relevant Sebi guidelines. Listed businesses must immediately disclose any information that could affect their stock price under Sebi regulations. Boards of directors of companies, however, are free to choose whether development is price-sensitive information and, if so, when it must be revealed.
The BSE claims that Zomato disclosed to its investors at 12:03 am on June 24 that the board will discuss an acquisition-related topic in the morning without mentioning Blinkit. According to Sebi’s insider trading regulations, any price-sensitive information must be promptly disclosed to investors. The listed entity is required to affirm or refute any material that is in the public domain and has been made available through news stories or social media, according to lawyers. This aims to maintain information symmetry and prevent any stock-market jerks.
In the present situation, the scenario could be interpreted in various ways. A top securities attorney who is aware of the development claimed that the corporation “may take a perspective that it did not reveal the acquisition until the agreement reached inevitability and if it had disclosed earlier, it may have created a false market.”
Also Read
Follow Startup Story
Related Posts
