TORONTO—The Ontario Securities Commission and Toronto-area cleantech company Electrovaya Inc. have settled a dispute over a series of “unbalanced” news releases issued between in 2015 and 2016.
Though the company will face no financial penalty, its president and CEO, Sankar Das Gupta, will pay the OSC a $250,000 administrative penalty for allowing Electrovaya to publish five statements about significant new business relationships that painted an overly optimistic picture of the company’s development during this time.
According to the OSC settlement, approved in court last week, the releases contained unbalanced statements about the nature of new corporate arrangements—many of which were non-binding deals.
“We expect public companies and their directors and officers to provide factual and balanced information to investors, and to disclose any events or circumstances that are likely to cause actual results to materially differ from previously-disclosed forward-looking information,” Huston Loke, director of Corporate Finance at the OSC, said in a statement.
Along with the $250,000 penalty, Das Gupta has agreed to pay for a review of Electrovaya’s corporate governance and its disclosure procedures, which could cost as much as $100,000. He will also participate in a course on corporate disclosure obligations.
Electrovaya, meanwhile, has revised its disclosure policy, bringing on external counsel to review its statements and hiring an investor relations firm with previous experience with TSX-listed companies. As part of the settlement, the company was also required to name a new independent director as the chair of its board and an independent director as head of its Disclosure Committee for a period of at least 20 months.
The Mississauga-based company said Alexander McLean has been appointed chair of the company’s board, while Carolyn Hansson will serve as head of the company’s Disclosure Committee.