The Supreme Court on Tuesday dismissed an appeal of Reliance Industries Limited and two of its officials against a decision of the Securities Appellate Tribunal, which had upheld a penalty imposed by markets regulator Sebi for not making prompt clarification to stock exchange about the Jio-Facebook deal.
Photograph: Francis Mascarenhas/Reuters
In June 2022, the capital markets regulator Sebi imposed a penalty totalling Rs 30 lakh on RIL and two individuals, Savithri Parekh and K Sethuraman, for not making prompt clarification to the stock exchange pertaining to the Jio-Facebook deal, which was disclosed through media reports.
The Securities and Exchange Board of India (Sebi) penalty was upheld by the SAT on May 2, 2025.
A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi declined to interfere with the SAT ruling and effectively affirmed Sebi’s findings that RIL and its compliance officers failed to promptly disclose unpublished price-sensitive information (UPSI) concerning the high-profile stake sale.
The top court said the SAT findings did not merit interference and moreover, no question of law was there needing adjudication.
Sebi’s adjudicating officer had in June 2022 imposed the Rs 30 lakh combined penalty after concluding that RIL violated Principle 4 of Schedule A of the Prohibition of Insider Trading (PIT) Regulations.
The regulator held that the company did not issue timely confirmations or denials in response to widespread media reports in March-April 2020 speculating on Facebook’s investment in Jio Platforms.
The SAT upheld the Sebi’s order.
“I find that the news pertaining JIO Facebook deal came out on March 24 and 25, 2020, and the information to the stock exchanges about the media release titled “Facebook to invest Rs 43,574 crore in Jio Platforms for a 9.99 per cent stake” was made on April 22, 2020, i.e. after 28 days and this calls for an appropriate penalty,” Sebi Adjudicating Officer Barnali Mukherjee had said in an order.
The regulator said Reliance Industries had the obligation to have enveloped the unpublished price-sensitive information (UPSI).
However, having come to know about the selective availability of the information it was incumbent upon the company to provide due clarification on its own.
Thus, Parekh and Sethurama should have clarified the exchanges on the news item, he had said.
It was observed that Reliance Industries, Parekh and Sethurama did not comply with the provision of principles of fair disclosure of unpublished price sensitive information (UPSI), which states there should be prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available and did not issue any clarification on the same as required under LODR regulations.
Under the LODR (Listing Obligations and Disclosure Requirements) rules, the listed entity may on its own initiative also confirm or deny any reported event or information to stock exchanges.
Accordingly, Sebi held them liable for the violation of the provisions of principles of fair disclosure for purposes of the code of practices and procedures for Fair Disclosure of UPSI under LODR regulations.
