SC rejects RIL plea against Rs 30 lakh fine over Jio

Supreme Court Dismisses Reliance Industries Ltd. Appeal Against SEBI Penalty

The Supreme Court has dismissed an appeal filed by Reliance Industries Ltd. and two of its officials against a Securities Appellate Tribunal (SAT) decision upholding a penalty imposed by the Securities and Exchange Board of India (SEBI) for failing to make prompt clarification to the stock exchange about the Jio-Facebook deal.

Background of the Case

In June 2022, SEBI imposed a penalty totalling Rs 30 lakh on RIL and two individuals, Savithri Parekh and K Sethuraman, for not making prompt clarification to the stock exchange pertaining to the Jio-Facebook deal.

Key Quotes from the Hearing

• CJI Surya Kant: "The bigger the company, the greater the responsibility. You must meticulously comply with the regulations." - This remark was made during the hearing when the top court declined to interfere with the SAT ruling.
• CJI Surya Kant: "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 are the best person to say if it is correct or not." - This statement highlights the importance of prompt clarification in response to market speculation.

SEBI Penalty Upheld by SAT

The SEBI penalty was upheld by the SAT on May 2, 2025, and the top court effectively affirmed SEBI's findings that RIL and its compliance officers failed to promptly disclose unpublished price-sensitive information (UPSI) concerning the high-profile stake sale.

Company's Defense

During the hearing, the counsel for RIL said that the firm had complied with the regulations and there was no insider trading or unlawful gains. He also argued that there was no obligation on any listed firm to "verify, confirm or deny such market rumours" under relevant regulations.

Consequences of Non-Compliance

As per Principle 4 of Schedule A of the Prohibition of Insider Trading (PIT) Regulations, listed companies have the obligation to make "prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available”. Failure to comply with this principle can result in penalties and financial repercussions.