New Delhi, Dec 2 (UNI) The Supreme Court on Tuesday dismissed the appeal filed by Reliance Industries Ltd (RIL) challenging the Securities Appellate Tribunal’s (SAT) order upholding a monetary penalty imposed for delayed disclosure of Facebook’s 2020 investment in Jio Platforms.
A Bench of Chief Justice of India Surya Kant and Justice Joymalya Bagchi rejected the appeals filed by RIL and its compliance officers -Savithri Parekh and K. Sethuraman – who had questioned the SAT’s May order. SAT had affirmed the Securities and Exchange Board of India’s (SEBI) June 2022 decision imposing a penalty of Rs 30 lakh under Section 15-I of the SEBI Act for violation of Principle 4 of Regulation 8(1) of the PIT Regulations, 2015, read with Regulation 30(11) of the LODR Regulations, 2015.
Under the Prohibition of Insider Trading (PIT) Regulations, listed entities must ensure prompt dissemination of unpublished price-sensitive information (UPSI) if it becomes selectively or inadvertently disclosed.
Dismissing the appeal, the Supreme Court observed, “We are satisfied that no case is made out for interference. The conclusions drawn by SEBI regarding violation of the 2015 Regulations stand affirmed. The issues dealt with by SEBI and SAT are substantially factual and raise no substantial question of law.”
In March 2020, media reports speculated about an ongoing Facebook–Jio deal, which had been under discussion since 2019. Although Reliance declined to comment at that time, it formally disclosed the investment to stock exchanges only in April 2020.
SAT held that RIL violated PIT Regulations by failing to promptly disclose UPSI once the news had surfaced in the media. Before the Supreme Court, Senior Advocate Ritin Rai, appearing for RIL, argued that there were no unlawful gains or insider trading, and that the company was not legally obligated to confirm or deny market speculation under Regulation 30(11).
He contended that compelling disclosure of non-final, non-binding deal discussions would create an unreasonable standard for listed entities.
The Bench, however, disagreed. Justice Bagchi noted, “The fact that a deal has not attained finality is also price-sensitive information.”
“Bigger the company, greater the responsibility. You must meticulously comply with the regulations,” CJI Kant observed.
He added that if the information circulating in the media was incorrect, RIL should have issued an immediate clarification, “You are the best person to say if it is correct or not. Silence in such circumstances has consequences.”
When counsel argued that RIL could not comment unilaterally because another party was involved, the CJI responded that the company could at least have stated that discussions were underway.
Rai submitted that SAT’s interpretation, treating UPSI as “generally available” only after official authentication contradicted SEBI’s own show-cause notice, which had suggested that widespread media reporting made the UPSI public. The Court, however, observed that show-cause notices are based on preliminary material and do not bind adjudication.
Despite submissions that the matter raised substantial legal questions with wide implications, the Bench declined to entertain the appeal. “The view taken is plausible, reasonable and based on sound principles. Why should we interfere?” the CJI remarked while dismissing the appeal.
