RELIANCE

’s Appeal Rejected in Insider Disclosure Case Linked to ₹43,574 Cr Facebook Deal

The Supreme Court has rejected Reliance Industries Ltd’s appeal against a Securities Appellate Tribunal (SAT) order that upheld a ₹30-lakh penalty on two compliance officers for delayed disclosure of the ₹43,574 crore Facebook-Jio investment deal. The ruling reinforces SEBI’s stance on timely disclosure of price-sensitive information, even amid confidentiality constraints. - Supreme Court Declines to Intervene A bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi ruled that the SAT order was based on factual findings and did not raise substantial legal questions. The ₹30-lakh penalty on RIL’s compliance officers Savithri Parekh and K. Sethuraman stands. - SEBI’s Penalty Rooted in Disclosure Delay SEBI imposed the penalty in June 2022, citing violation of insider trading norms. It found RIL failed to promptly disclose negotiations with Facebook, especially after international media reports surfaced in March 2020, causing a sharp rise in RIL’s share price. - RIL’s Defense Cites Confidentiality Constraints RIL argued that the deal was not definitive at the time and that confidentiality agreements with Facebook prevented early disclosure. It also cited Regulation 30(11), which made responding to market rumours discretionary unless prompted by stock exchanges. - SAT’s May 2025 Verdict Upheld SEBI’s View SAT ruled that the deal had reached a firm stage by February 2020 and that media leaks didn’t make the information “generally available” unless confirmed by the company. It upheld the penalty, emphasizing the need for equal access to price-sensitive information. - Implications for Corporate Governance The case underscores the importance of timely and transparent disclosures in capital markets. It signals that confidentiality clauses cannot override regulatory obligations once market-moving information enters the public domain.