The board had approved the acquisition of Blinkit for Rs 4,447 crore. Investors said delays have resulted in losses for them and timely disclosure would have helped them be better prepared.
The investors, in a letter to the Sebi chairman dated June 29, said news about a possible takeover had been reported in the press and had been doing the rounds on social media for more than a month before the deal was announced. But Zomato, he alleged, neither confirmed nor denied the reports. Shares of Zomato have lost 20% since the deal was announced after market hours on June 24. ET could not ascertain the identity of the investors or verify their stake in Zomato.
SEBI did not respond to queries.
The company said that the disclosure was made in a timely manner in accordance with the regulations.
“Zomato has complied with applicable laws and relevant SEBI guidelines and made necessary disclosures on approval of transactions and signing of definitive agreements by the Board,” Zomato told ET in response to queries.
SEBI regulations require listed companies to disclose price-sensitive information without delay. However, company boards are at liberty to decide whether any developments are price-sensitive information and, if so, at what point it needs to be disclosed.
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“These investors alleged that the company did not comment on the deal. However, some of the more knowledgeable investors adjusted their exposure with Zomato right after the social media buzz started,” said a person with knowledge of the matter. “He has also referred to a recent SEBI order punishing a blue-chip company and its employees for similar violations.”
Investors also cited the stock market disclosures made by Zomato in the early hours of the day of the board meeting. “Even in this disclosure he has not mentioned any details of the deal,” the person said.
According to BSE, Zomato informed its investors at 12:03 am on June 24 that the board would take up the matter related to the acquisition in the morning without naming Blinkit.
“In accordance with Regulation 29 of the Listing Regulations, as amended, you are informed that a meeting of the Board of Directors of Zomato Limited (“Company”) is scheduled to be held on Friday, the 24th June, 2022, to discuss a Potential takeover transaction by the company, for which equity shares of the company may be issued by way of preferential issue,” that disclosure had said.
SEBI’s insider trading rules state that any price-sensitive information should be disclosed to investors in a timely manner. The lawyers said that if such information is available in the public domain through news reports or social media, the listed entity is bound to confirm or deny the same. The objective is to ensure information consistency and avoid any feedback in stock.
“The matter may be open for interpretation in the present scenario. (d) the company may consider that it did not disclose the acquisition until the deal is done and if it had disclosed earlier, it may have created a false market. A leading securities attorney said about