Today, On 2nd December, in the Jio-Facebook Case, Supreme Court declines to interfere with SEBI’s Rs.30 lakh penalty on Reliance, holding that the findings raised no substantial question of law. The decision leaves intact SEBI’s action over delayed disclosure of the deal leak.
New Delhi: The Supreme Court dismissed Reliance Industries Limited’s (RIL) appeal regarding the Securities Appellate Tribunal (SAT) order, which upheld a Rs.30 lakh penalty against two of its compliance officers for not making timely disclosures related to the Facebook-Reliance Jio deal.
A Bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi stated,
“The issue dealt with by SEBI and SAT are substantially a question of fact, giving rise to no substantial question of law to be considered by court.”
This case stems from a Securities and Exchange Board of India (SEBI) order dated June 20, 2022, which penalized RIL and its compliance officers, Savithri Parekh and K Sethuraman, for allegedly violating Principle 4 of Schedule A to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations).
SEBI contended that RIL did not promptly and transparently share unpublished price sensitive information (UPSI) regarding Facebook’s investment in Jio Platforms Limited after it surfaced in international media in March 2020.
According to SEBI, the negotiations between RIL and Facebook progressed through late 2019 and early 2020 and led to a non-binding term sheet on March 4, 2020, followed by active due diligence.
The companies signed binding transaction documents on April 21, 2020, with RIL officially announcing the Rs.43,574-crore investment on April 22, 2020.
However, on March 24, 2020, outlets like Reuters and Financial Times reported that Facebook was nearing a 10% stake in Jio, information that significantly impacted RIL’s stock price.
SEBI argued that once these details leaked into the media during the UPSI period, RIL had a duty under Principle 4 of Schedule A to promptly disclose accurate information to ensure equitable access to all investors.
In response, RIL claimed that at that time, Regulation 30(11) of the SEBI LODR Regulations, which covers the verification of market rumors, was discretionary, and the company was not obligated to confirm or deny speculative reports unless instructed by the stock exchanges.
RIL also maintained that the information lacked the necessary concrete or credible status until the binding documents were executed, and therefore, did not qualify as UPSI that demanded immediate disclosure.
Earlier, On May 2, 2025, the SAT rejected RIL’s appeal, affirming SEBI’s conclusions.
The Appellate Tribunal determined that the details of the deal had reached a credible and concrete status by late February 2020, that market reactions indicated its price sensitivity, and that media leaks did not render the information “generally available” until verified by the company.
SAT concluded that RIL was required to issue a clarificatory disclosure once the information was leaked and upheld the penalty.
Senior Advocate Ritin Rai represented RIL alongside Advocate Sasi Prabhu.
Case Title: Reliance Industries Limited v. SEBI