The Securities Appellate Tribunal (SAT) has upheld the Rs 3 million penalty imposed by the Securities and Exchange Board of India (SEBI) on Reliance Industries Limited (RIL) and two of its compliance officers for failing to promptly disclose the 2020 stake sale in its subsidiary, Jio Platforms, to Facebook.
The SEBI order, issued in 2022, alleged that there was considerable news coverage in March and April 2020 about Facebook’s potential investment in Jio Platforms, well before the formal corporate announcement on April 22, 2020. According to SEBI, several media reports indicated that Facebook was close to finalising a multibillion-dollar deal to acquire nearly 10 per cent stake in Jio. One such report, published on March 25, 2020, triggered a nearly 15 per cent surge in RIL’s stock price, prompting regulatory scrutiny.
SEBI further noted that RIL subsequently made three announcements between April and May 2020, confirming Facebook’s Rs 435.74 billion investment for a 9.99 per cent stake, followed by Silver Lake’s Rs 56.55 billion investment for a 1.15 per cent stake and Vista Equity’s Rs 113.67 billion investment for 2.32 per cent.
The regulator held that RIL and its compliance officers had failed to make timely disclosures despite being aware of significant developments, thereby violating fair disclosure norms. SAT has now endorsed SEBI’s findings, maintaining the penalty.
