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The Supreme Court on Tuesday upheld the Securities and Exchange Board of India’s (SEBI) decision to impose a Rs. 30 lakh penalty on Reliance Industries Ltd. (RIL) and its compliance officials for failing to clarify media reports relating to Facebook’s high-value investment in Jio platforms.
“The bigger the company, the greater the responsibility. You must meticulously comply with the regulations,” a bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi.
During the hearing, the bench said that large corporations must demonstrate stricter compliance with disclosure norms and transparency obligations.
The court noted that despite the market impact of the Facebook-Jio stake discussion, RIL did not make timely clarifications when reports began circulating as early as March 24-25, 2020.
In June 2022, SEBI imposed penalties on RIL and officials Savithri Parekh and K. Sethuraman, after concluding that the company failed to fulfil its obligations under the Prohibition of Insider Trading (PIT) Regulations.
According to SEBI, the company waited 28 days from late March until April 22, 2020, to officially confirm Facebook’s Rs. 43,574 crore investment for a 9.99% stake in Jio platforms.
The SEBI penalty was upheld by the Securities Appellate Tribunal (SAT) on May 2, 2025. “In our considered view, the conclusion drawn by the 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 the SEBI and the SAT are substantially issues of fact giving rise to no substantial question of law for consideration by this court,” the bench said.
SEBI argued that this delay violated the principle of fair disclosure, which mandates immediate clarification when unpublished price-sensitive information becomes selectively public.
Counsel representing RIL argued that the company had complied with all regulatory requirements and that ongoing negotiations do not require disclosure. They maintained that media speculation should not compel listed entities to respond unless the deal is finalised.
However, the Supreme Court disagreed, noting that when a report about such a transaction appears in global media and triggers notable stock price movements, RIL’s shares rose 15% on the first report and another 10% when the deal was officially announced.
The bench said that PIT regulations exist to maintain market integrity and prevent speculative trading based on partial or leaked information.
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Dismissing RIL’s appeal, the bench said the conclusions drawn by SEBI regarding violations of PIT regulations do not warrant any interference from the SC. “That apart, the issue dealt with by SAT is substantially based on facts and no question of law arises which may warrant consideration by the SC,” the bench said.
