SC rejects RIL plea against ₹30L fine for not disclosing Jio-FB deal

Bench says "bigger the company, greater the responsibility," dismisses appeal over 2020 insider trading violation

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The Supreme Court on Tuesday upheld the Securities and Exchange Board of India’s (Sebi’s) decision to fine Reliance Industries Limited (RIL) ₹30 lakh for failing to make timely disclosures about Facebook’s investment in Jio Platforms after details of the deal appeared in the media.

 

A bench of Chief Justice of India (CJI) Surya Kant and Justice Joymalya Bagchi dismissed RIL’s appeal against the Securities Appellate Tribunal’s (SAT’s) order confirming the penalty, observing that the matter involved factual findings and did not raise any substantial question of law.

 

"In our considered view, the conclusion drawn by Sebi with respect to the violation of the 2015 regulation, whereby there is a statutory embargo on insider trading, we are satisfied that there is no case made out for interference. That apart, the issues dealt with by Sebi and the SAT are substantially issues of fact, giving rise to no substantial question of law for consideration by this court," the top court said.

 

The case stems from the market regulator’s June 2022 order, penalising RIL and two of its compliance officers Savithri Parekh and K Sethuraman for breaching disclosure norms under the Sebi (Prohibition of Insider Trading) Regulations, 2015. The regulator found that RIL did not promptly disseminate unpublished price-sensitive information (UPSI) regarding Facebook’s proposed investment in Jio Platforms, despite international media reports about the transaction emerging in March 2020.

 

According to the disclosure norms, listed companies have the obligation to make "prompt dissemination of UPSI that gets disclosed selectively, inadvertently or otherwise to make such information generally available”.

 

Sebi’s investigation revealed that negotiations between RIL and Facebook had progressed through late 2019 and early 2020, ending in a non-binding term sheet on March 4, 2020. The companies executed binding agreements on April 21, 2020, and RIL publicly announced the ₹43,574 crore investment the next day. However, reports by Reuters, the Financial Times, and other outlets on March 24, 2020, suggesting Facebook’s plan to acquire a 10 per cent stake in Jio, caused a surge in RIL’s share price.

 

According to Sebi, once such reports surfaced during the UPSI period, RIL was required to promptly clarify or confirm the information to ensure a fair and transparent market.

 

RIL countered that Regulation 30(11) of the Sebi (Listing Obligations and Disclosure Requirements) Regulations made verification of market rumours optional at the time, and that the company was not obliged to comment on speculative reports unless directed by the exchanges. It further maintained that the information had not reached a “concrete” stage before April 2020.

 

The SAT, in its May 2025 ruling, agreed with Sebi’s view that by February 2020, the Facebook investment had reached a credible and price-sensitive stage. It held that market reaction to the leaks underscored their materiality, and that the company’s silence amounted to a lapse in compliance. The tribunal concluded that RIL should have issued a clarificatory disclosure once the reports became public, and upheld the penalty.

 

During arguments in court, CJI Kant had highlighted that “the bigger the company, the greater the responsibility".

 

"You must meticulously comply with the regulations," he had said, and added: "The moment this news came that Facebook is making such a huge investment, if it was not correct, you should have immediately denied. If everybody knows that such a huge investment is coming, the market price will rise on speculation. You (RIL’s lawyer) are the best person to say if it is correct or not.”

 

When RIL’s counsel argued that the company could not make a public comment without the agreement of the other party, the CJI responded that Reliance could still have clarified that “the deal is under discussion”.