Ola Electric, once India’s largest maker of electric two-wheelers, is likely to face an investigation by capital markets regulator Securities and Exchange Board of India (Sebi) over two instances of insider trading, according to a report by NDTV Profit, citing at least three anonymous sources familiar with the matter.

The report claims that Sebi is purportedly investigating two incidents of trading made by an insider of the company from privileged, material information between October and December 2024, adding that the company’s related-party transactions might also be scrutinised as part of the probe, along with its February sales numbers, which also came under the radar after Bloomberg reported that its to-be-launched electric motorcycles were also included in the February sales figures.

However, it is not clear whether Sebi has contacted Ola Electric or not.

Fortune India could not independently verify these claims, but Ola Electric later issued a rejoinder, calling the report factually inaccurate.

As per the news report, between October and December last year, Claudio Zizzo, Ola Electric’s vice president overseeing the company’s electrical and electronics division, made at least two day trades on days when Ola Electric founder Bhavish Aggarwal posted about the latest business developments. On November 26 last year, Aggarwal posted about the launch of the Ola S1 Z and Gig range of electric scooters, “starting at just ₹39,000”at 2:46 PM. On the same day, Zizzo bought 62,205 shares worth ₹54,72,534.6 at ₹87.97 apiece.

However, the company filed a regulatory disclosure about the product launches only after the market had closed for the day, when Ola Electric shares closed 5.52% higher at ₹73.42. The report alleges that over the next three days, Zizzo offloaded all the shares which he bought, and on November 27, Ola Electric’s stock hit the upper circuit. Apart from this instance, Zizzo made only four buy-sell transactions.

Early last month, Sebi had issued a warning letter over non-compliance with disclosure norms. The regulator issued an administrative warning letter to Ola Electric Mobility over disclosure violations on January 7. The warning was related to CEO Bhavish Aggarwal's announcement in December about the company’s plans to quadruple its stores from 800 to 4,000. In his post on X, Aggarwal had stated that the expansion would be completed December 20, but the rollout occurred on December 25.

The January 7-letter warned Ola Electric for violating four clauses of the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015. The violations pertain to ensuring equal, timely, and cost-efficient access to relevant information for all investors. The regulator said that the EV manufacturer announced its expansion plans on X (formerly Twitter), four hours before informing the exchanges. The regulator flagged the premature dissemination of information on social media, instead of first informing stock exchanges, as a failure to meet disclosure obligations.

Sebi has taken serious note of this violation and warned the company to improve compliance standards to prevent future lapses. It also cautioned that further violations may result in enforcement action under the SEBI Act, 1992, and related regulations.