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Informist, Tuesday, Dec. 2, 2025

 

--SC OKs SEBI fine on RIL for not disclosing Meta-Jio Platforms deal promptly

--SC on RIL-Meta case: Co bound to disclose info if it generates speculation

 

NEW DELHI – The Supreme Court Tuesday upheld the Securities and Exchange Board of India's penalties against Reliance Industries Ltd. and its compliance officers for not promptly disclosing a deal between its arm Jio Platforms Ltd. and Meta Inc. In 2022, the market regulator had imposed a penalty of INR 3 million against RIL and others for not providing price-sensitive developments about Jio Platforms and Meta Inc, resulting in non-compliance with Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 read with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

 

A bench led by Chief Justice of India Surya Kant said that a company is bound to disclose information if it generates speculation. The apex court said that if a company is a bigger entity, there is greater onus on it to provide this information to customers. The moment the news came that Meta was entering into a deal with Jio Platforms, Reliance Industries should have immediately said whether the information was correct or not, said the bench, also comprising Justice Joymalya Bagchi. "The very fact that you (Reliance Industries) chose to remain silent" was further violation of SEBI Regulations, the bench said. 

 

The top court said that by upholding SEBI's penalty in May, the Securities Appellate Tribunal had taken as a plausible view based on legal principles. The apex court said that no case for interference was made out by Reliance Industries Ltd. against the appellate tribunal order. The issues decided by the market regulator and the appellate tribunal gave rise to no substantive question of law that might warrant consideration of the apex court at length, said the bench.

 

Reliance Industries questioned the expectations from listed companies on responding to market rumours. "How is the listed company going to react to media speculation? What is the company going to do?" asked Reliance Industries. The apex court noted that the SEBI (Listing Obligations and Disclosure Requirements) Regulations related to probing of the responsibility of companies in situations involving potential market-sensitive information. "How will you (RIL) absolve yourself from this responsibility?" asked Chief Justice Surya Kant, adding that the "regulations are very exhaustive and elaborate."

 

The case has its genesis in Reliance Industries and Meta being involved in preliminary discussions on investments by the latter in Jio Platforms. In 2019, RIL and Meta executed a confidentiality and non-disclosure agreement and on Mar. 4, 2020, they executed a non-binding term sheet. 

 

During the period of negotiations and due diligence, on Mar. 24, 2020, the Financial Times published a news article that said, "Facebook (now Meta) was close to signing a preliminary deal for a 10% share in Reliance Jio." This news with different headlines was also published on the same day by Reuters, The Economic Times, Business Today, and Mint. Some of these articles reported that RIL had declined to comment on the matter. 

 

On Apr. 18, 2020, the board of directors of Reliance Industries and Jio Platforms approved the execution of the transaction documents in connection with the investment by Meta in Jio. On Apr. 21, 2020, the definitive transaction documents of the Jio-Meta deal were executed and on the next day, RIL informed stock exchanges about the deal. 

 

On Dec. 22, 2021, SEBI issued show-cause notices to RIL and others for violations of SEBI Regulations. Thereafter, SEBI penalised RIL and its officers, noting that they should have put out a clarification and said that post publication of the news articles, the stock price of RIL went up almost 15% on Mar. 25, 2020. In an appeal by RIL, the appellate tribunal held, "... in our view, it was the responsibility of the RIL to have made prompt disclosure to make information generally available, when it was disclosed selectively in certain media by unknown sources, which had ostensibly reached to only selected universe of subscribers of such international print media and not to all investors/potential investors".  

 

At 1201 IST, shares of Reliance Industries Ltd. were down 0.9% at INR 1,552.00 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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