Settlement follows allegations by the OSC that Electrovaya issued unbalanced press releases and failed to update its disclosure record.
TORONTO — The Ontario Securities Commission (OSC) has approved a settlement agreement with Electrovaya Inc. and its CEO, Dr. Sankar Das Gupta, in connection with the company’s failure to comply with disclosure obligations, including its failure to update forward-looking information.
The settlement agreement follows allegations by OSC Staff that Electrovaya issued unbalanced press releases and failed to update its disclosure record, and that Dr. Das Gupta authorized, permitted or acquiesced in such conduct.
In 2016, OSC alleged Electrovaya issued five press releases announcing significant new business relationships, none of which contained balanced disclosure discussing the nature of the arrangements or the related risks, contingencies or barriers to realization. OSC claimed Electrovaya also failed to update its disclosure record in respect of two other customer arrangements, when subsequent events made it clear that previously disclosed revenue estimates would not be met.
In connection with the settlement, a consultant will review Electrovaya’s corporate governance framework and its disclosure controls and procedures. The review, which is estimated to cost between $85,000 and $100,000, will be paid for by Das Gupta, who will also pay an administrative penalty of $250,000.
Das Gupta will also be prohibited from becoming or acting as a director or officer of a reporting issuer (other than Electrovaya or an affiliate) for one year.