Supreme Court affirms ₹30 lakh SEBI penalty on Reliance Industries Limited

A bench of Chief Justice of India Surya Kant and Justice Joymalya Bagchi dismissed RIL’s challenge to a May 2, 2025, order of the Securities Appellate Tribunal (SAT), which had affirmed SEBI’s findings of delayed disclosure. The court stressed that when news of a deal of such magnitude surfaces and has the potential to sharply influence stock prices, the company involved cannot remain silent. “If unconfirmed media reports also impact your business, you are bound to disclose such information,” the bench told RIL’s counsel, senior advocate Ritin Rai, during the hearing. “These are components of ethical values, and in such matters, there cannot be any leniency or relaxations. If you are a big entity, the onus is bigger. You must meticulously comply with all regulations,” it added. The court noted the circumstances surrounding the March 24, 2020, report published in the Financial Times, which revealed that Facebook was close to acquiring a 10% stake in Jio Platforms. Domestic media amplified the development within hours, leading to a 15% surge in RIL’s share value. Yet, the company issued no statement, neither confirming nor denying the news, until April 22, 2020, when the definitive agreement was executed and formally announced, triggering another sharp price rise. “The moment this news came, and it was everywhere that a huge investment is coming in, should you not inform people when it is going to impact the markets?” the bench asked. When Rai contended that the agreement was still under negotiation and therefore did not require disclosure, the bench disagreed: “That also is information you should give. You could have said that there is no finality. An official word from your side would have helped. The very fact that you chose to remain silent is itself a violation.” The bench rejected the argument that the relevant disclosure clause was introduced only later and required examination by the court, pointing out that both SEBI and SAT had already addressed the issue comprehensively. “We would have still understood if you had claimed confidentiality of the ongoing negotiations. You have not made out that case either,” it said. Concluding the hearing, the court observed that the findings of SEBI and SAT rested firmly on established facts and the regulatory framework governing price-sensitive information. “The conclusions arrived at by SEBI and SAT are based on the factual matrix. We do not find any ground to interfere with the impugned order,” the bench said while dismissing the appeal. The Supreme Court’s ruling sends a strong signal on the responsibility of listed companies to maintain transparency, particularly during negotiations involving multi-billion-dollar transactions. The proceedings on Tuesday underscored that silence in the face of market-moving information can itself be construed as withholding material facts, eroding investor trust. SEBI’s June 2022 adjudicating order held RIL and its compliance officers, Savithri Parekh and K Sethuraman, guilty of violating the Prohibition of Insider Trading (PIT) Regulations. According to the order, the confidentiality agreement signed between RIL and Facebook in September 2019 and the non-binding term sheet executed on March 4, 2020, constituted material developments that warranted proactive disclosure once they entered the public domain through credible media. Before SAT, RIL had argued that media reports did not amount to “selective leaks” and therefore did not trigger disclosure requirements. SAT rejected this defence, noting that high-stakes cross-border transactions reported by reputable international media cannot be brushed aside as mere speculation when shareholders and the larger market are impacted.