Aniket PujariThe Supreme Court on Tuesday rejected Reliance Industries Ltd’s (RIL) appeal against a Securities Appellate Tribunal (SAT) order that had upheld a ₹30-lakh penalty on two of its compliance officers for the delayed disclosure of the ₹43,574-crore Facebook-Jio investment deal in 2020.
A bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi declined to intervene, noting that the order rested entirely on factual findings and did not raise any substantial question of law.
The case file
On 20 June 2022, the Securities and Exchange Board of India (Sebi) imposed penalties on RIL’s compliance officers, Savithri Parekh and K. Sethuraman, for allegedly violating the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The regulator found that RIL failed to promptly disclose unpublished price-sensitive information (UPSI) relating to Facebook’s investment negotiations with Jio Platforms, particularly after details were reported in international media in March 2020.
Appearing for RIL, senior counsel Ritin Rai argued that the case involved no allegation of insider trading, nor any claim that anyone derived an unfair benefit. He submitted that the transaction involved a counterparty bound by a strict confidentiality agreement, and RIL could not unilaterally violate those terms. He questioned whether it could reasonably be expected to confirm or deny speculative media reports while legally bound to maintain confidentiality.
Chief Justice Surya Kant, however, remarked that once information about such a substantial investment surfaced in the public domain, RIL had a responsibility to clarify its accuracy. “When news of a massive investment like this comes out, you know how the speculative market will react. If it was incorrect, you should have immediately said so. Only you are in the best position to tell the public whether the information is right or wrong—you could have made a statement,” he said.
The deal
Negotiations between Facebook and RIL had progressed considerably through late 2019, culminating in a non-binding term sheet on 4 March 2020, followed by due diligence and then a binding agreement signed on 21 April 2020, according to Sebi’s order. RIL formally announced the ₹43,574-crore investment on 22 April.
Sebi noted that after Reuters, Financial Times, and other international outlets reported on 24 March 2020 that Facebook was close to acquiring a 10% stake, RIL’s share price rose sharply. Sebi maintained that once such price-sensitive details appeared in the media during the UPSI period, RIL was obligated to issue a clarificatory disclosure to ensure equal access to information.
RIL argued that, under Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations at the time, responding to market rumours was discretionary unless stock exchanges specifically sought clarification, and that the information had not yet reached a definitive stage to warrant disclosure.
The LODR regulations require listed companies to disclose material information, such as major financial transactions, leadership changes, or mergers, in a timely manner, ensuring that investors are not disadvantaged by asymmetrical access to information.
RIL appealed the Sebi order before SAT, but on 2 May 2025, the tribunal dismissed the challenge, holding that the deal had reached a concrete and credible stage by February 2020 and that significant stock price movement demonstrated the information’s price sensitivity.
SAT held that media leaks did not make the information “generally available” unless authenticated by the company, and that RIL was obligated to clarify once the leak occurred, thereby upholding the penalty.
Mint’s emailed query to RIL remained unanswered until publication.
