Supreme Court upholds Rs 30 lakh penalty on RIL for Jio-Facebook deal disclosure delay
The Supreme Court has affirmed a Rs 30 lakh fine against Reliance Industries and two compliance officers for failing to promptly clarify unpublished price-sensitive information on the Jio-Facebook deal, reinforcing regulatory expectations for large corporations.
- Dec 2, 2025,
- Updated Dec 2, 2025 10:16 PM IST
The Supreme Court has rejected Reliance Industries Limited's (RIL) plea against an order by the Securities Appellate Tribunal (SAT) upholding a Rs 30 lakh penalty imposed by the Securities and Exchange Board of India (SEBI). The penalty was for failing to issue a timely clarification regarding speculation about Facebook's investment in Jio Platforms during March and April 2020.
The decision reinforces the obligations of listed firms to ensure prompt disclosure of unpublished price-sensitive information, especially in high-profile deals. The ruling signals continued scrutiny of compliance standards for major corporations, with the Supreme Court emphasising that larger companies bear a greater responsibility in market disclosures.
SEBI found that RIL and two compliance officers, Savithri Parekh and K Sethuraman, breached Principle 4 of the Prohibition of Insider Trading (PIT) Regulations by not making prompt disclosures when media reports began circulating about the potential Facebook investment. SEBI concluded that the company did not fulfil its obligations under the Listing Obligations and Disclosure Requirements (LODR) regulations, which mandate immediate dissemination of any unpublished price-sensitive information disclosed selectively or inadvertently. Both the tribunal and the Supreme Court have upheld this interpretation.
SEBI's adjudicating officer determined in June 2022 that RIL, Parekh and Sethuraman failed to comply with the principles of fair disclosure for unpublished price-sensitive information (UPSI). The regulator held them liable for not issuing timely clarifications as required, noting that prompt action was vital when information had been selectively disclosed or was circulating as speculation in the market. The SAT confirmed these findings in its order dated 2 May 2025.
During the Supreme Court proceedings, counsel for RIL asserted that the company had complied with regulatory obligations and insisted there was neither insider trading nor any unlawful financial gains. The company also argued there was no explicit obligation under the regulations to confirm, deny, or verify market rumours. This argument was rejected by the court, which placed importance on the need for prompt clarification to prevent speculative trading and misinformation.
SEBI's case was based on RIL's failure to address market speculation about the Jio-Facebook deal, despite widespread media coverage. The bench highlighted the duty of a listed entity to make information generally available when it comes to light, whether through inadvertent or deliberate selective disclosure. The Supreme Court cited the regulatory requirement for "prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available."
The bench, comprising Chief Justice Surya Kant and Justice Joymalya Bagchi, stated during the hearing, "The bigger the company, the greater the responsibility. You must meticulously comply with the regulations." This observation underlined the court's expectation that large corporations bear heightened accountability for timely and accurate market disclosures, especially when dealing with high-value investments capable of influencing stock prices.
In its final order, the bench remarked, "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 court also addressed arguments regarding the company's alleged lack of obligation to deal with market rumours. The Chief Justice commented during proceedings, "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."
(With PTI inputs)
The Supreme Court has rejected Reliance Industries Limited's (RIL) plea against an order by the Securities Appellate Tribunal (SAT) upholding a Rs 30 lakh penalty imposed by the Securities and Exchange Board of India (SEBI). The penalty was for failing to issue a timely clarification regarding speculation about Facebook's investment in Jio Platforms during March and April 2020.
The decision reinforces the obligations of listed firms to ensure prompt disclosure of unpublished price-sensitive information, especially in high-profile deals. The ruling signals continued scrutiny of compliance standards for major corporations, with the Supreme Court emphasising that larger companies bear a greater responsibility in market disclosures.
SEBI found that RIL and two compliance officers, Savithri Parekh and K Sethuraman, breached Principle 4 of the Prohibition of Insider Trading (PIT) Regulations by not making prompt disclosures when media reports began circulating about the potential Facebook investment. SEBI concluded that the company did not fulfil its obligations under the Listing Obligations and Disclosure Requirements (LODR) regulations, which mandate immediate dissemination of any unpublished price-sensitive information disclosed selectively or inadvertently. Both the tribunal and the Supreme Court have upheld this interpretation.
SEBI's adjudicating officer determined in June 2022 that RIL, Parekh and Sethuraman failed to comply with the principles of fair disclosure for unpublished price-sensitive information (UPSI). The regulator held them liable for not issuing timely clarifications as required, noting that prompt action was vital when information had been selectively disclosed or was circulating as speculation in the market. The SAT confirmed these findings in its order dated 2 May 2025.
During the Supreme Court proceedings, counsel for RIL asserted that the company had complied with regulatory obligations and insisted there was neither insider trading nor any unlawful financial gains. The company also argued there was no explicit obligation under the regulations to confirm, deny, or verify market rumours. This argument was rejected by the court, which placed importance on the need for prompt clarification to prevent speculative trading and misinformation.
SEBI's case was based on RIL's failure to address market speculation about the Jio-Facebook deal, despite widespread media coverage. The bench highlighted the duty of a listed entity to make information generally available when it comes to light, whether through inadvertent or deliberate selective disclosure. The Supreme Court cited the regulatory requirement for "prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available."
The bench, comprising Chief Justice Surya Kant and Justice Joymalya Bagchi, stated during the hearing, "The bigger the company, the greater the responsibility. You must meticulously comply with the regulations." This observation underlined the court's expectation that large corporations bear heightened accountability for timely and accurate market disclosures, especially when dealing with high-value investments capable of influencing stock prices.
In its final order, the bench remarked, "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 court also addressed arguments regarding the company's alleged lack of obligation to deal with market rumours. The Chief Justice commented during proceedings, "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."
(With PTI inputs)