CIOInsider India Magazine
Investors Complain SEBI about Zomato's Untimely Disclosure of Blinkit's Acquisition
The Securities and Exchange Board of India (SEBI) received complaints from high net-worth investors about Zomato for not making disclosures in time about its purchase of Blinkit to the stock exchanges.
The investors claimed that they suffered losses due to the delay and that timely disclosure would have helped them be better prepared.
The investors also complained to SEBI that the news about potential acquisition had been reported to the press and that it was being circulated across social media platforms for more than a month prior to the deal’s announcement.
After the announcement Zomato’s shares were said to have risen about 20 percent post market hours.
Investors noted that the company didn’t not comment on the deal. Some investors adjusted their exposure to Zomato no sooner social media started talking.
SEBI’s response to the current scenario denotes that the matter will be open for interpretation. The company can take a view that it did not disclose the acquisition until the deal attained eventuality and if it had disclosed earlier, it may have created a false market
According to Zomato, it informed the bourses about the acquisition on June 24, 2022 receiving approval of Blinkit for Rs.4,447 crore. It believes that its disclosure was in time with the rules.
It says that it complied applicable laws and relevant SEBI guidelines while making necessary disclosures upon approval of the transaction by the board and signing of definitive agreements.
SEBI norms state that listed companies can disclose any price sensitive information without delay. It also says that company boards have a say in determining whether a development is price sensitive, including what juncture it can be disclosed.
The Bombay Stock Exchange claims that Zomato made a disclosure at 12:03 am on June 24, 2022 informing its investors that the board will take up an acquisition-related matter in the morning without naming Blinkit.
SEBI’s response to the current scenario denotes that the matter will be open for interpretation. The company can take a view that it did not disclose the acquisition until the deal attained eventuality and if it had disclosed earlier, it may have created a false market.
