Sebi directs Tata Motors to probe leak of quarterly earnings data on WhatsApp

The Securities and Exchange Board of India (Sebi) has asked Tata Motors to conduct an internal inquiry into the alleged leak of unpublished price-sensitive information (UPSI) relating to its December 2015 quarter earnings on social media platform WhatsApp and take appropriate action against those responsible.

Sebi also ordered Tata Motors to strengthen its existing processes and controls to prevent any leakage of unpublished price sensitive information in the future after a preliminary examination by the markets regulator showed the financial numbers circulated through WhatsApp posts closely matched the actual results.

A Sebi probe into Tata Motors revealed that while WhatsApp messages by some private groups had showed their users the company's quarterly turnover as Rs72,256 crore, the subsequent official announcement stated this figure at Rs72,256.40 crore. Similarly, the leaked numbers showed the company's margins to be at 14.20 per cent for the quarter against the actual figure of 14.17 per cent. The company's net profit too was leaked on WhatsApp, the Sebi probe found.

''The messages circulated in WhatsApp matched with the quarterly financial results of the company for 31 December, 2015, which were published subsequently,'' said the Sebi order.

Sebi has also asked Tata Motors to find out the role of the members of its various committees involved in generation of the original data for the purpose of determination of key figures pertaining to financial figures.

It has given three months to the Tata Group company to complete the probe and submit a report on the present systems, the details of the entities responsible for monitoring such systems and the periodicity of such monitoring.

The leakage of unpublished price sensitive information is reported to have allowed traders and other entities to take undue advantage of the privileged information and make unfair market gains, breaching Sebi's insider trading norms.

Any leak or misuse of a listed firm's information by any entity, before the company's official announcement on exchanges, and trading on the basis of this information amounts to insider trading, considered a serious violation of securities market laws and Sebi is authorised to take serious action against such an entity.

Sebi had earlier ordered similar orders against Axis Bank Ltd and HDFC Bank Ltd into cases relating to leak of sensitive financial information on WhatsApp.