The Securities and Exchange Board of India has ordered Tata Motors to conduct an internal probe in relation to alleged leak of its financial results on the messaging platform WhatsApp even before the earnings were officially announced.
"Tata Motors shall conduct an internal inquiry into the leakage of unpublished price sensitive information relating to its financial results and take appropriate action against those responsible for the same, in accordance with the law," Madhabi Puri Buch, whole time member of SEBI, said in the order issued on Tuesday.
The order further states that Tata Motors shall strengthen its processes, systems and controls to ensure that such instances of leakage of unpublished price sensitive information do not recur in future.
The country's largest commercial vehicle maker will have to complete the probe within three months from the date of the order and then in seven days thereafter must file the report with SEBI.
The alleged leak dates back to Tata Motors earnings announced for the quarter-ended December 2015.
The market regulator stated that in course of preliminary examination, it was observed that the messages circulated on WhatsApp matched with the quarterly results of the company for the quarter.
For instance, the WhatsApp post projected Tata Motors turnover for that quarter at Rs 72,256 crore, while the actual turnover reported by the company later that day was identical at Rs 72,256.40 crore.
The company's EBITDA (Earnings before interest, taxes, depreciation and amortization) – Rs 10,236 crore (as per the WhatsApp post) and Rs 10,236.47 crore (actual reported number) – also matched, as did the margin (14.20 per cent as per the post and 14.17 per cent reported by the company).
Profit before and after tax as well as insurance claim figures in the WhatsApp post also were identical to those reported by the company, according to SEBI.
The post was shared on 12:29 on February 11, 2016 on the messaging platform, while Tata Motors declared its earnings at 15:16 hours the same day.
"It is observed that the financial figures pertaining to the quarterly results of Tata Motors were matching with figures that were in circulation prior to official announcement. The same could not have been possible without leakage of information from person(s), who were privy to the information relating to financials prior to its official announcement," Buch said in the order.
SEBI says the scope of inquiry by Tata Motors must include the possible role of members of committee involved in generation of the original data, people involved in preparing board notes and presentations, and any other people who had access to the information.
Tata Motors is not the first company named by SEBI in its investigation related to financial earnings being leaked on messaging platforms like WhatsApp.
Similar orders have earlier been issued against private sector lenders HDFC Bank and Axis Bank.