SC rejects Reliance’s challenge to SEBI’s Rs 30 lakh penalty in Jio–Facebook leak case

New Delhi: The Supreme Court on Tuesday dismissed Reliance Industries’s (RIL) appeal challenging a Securities Appellate Tribunal (SAT) decision that upheld a Rs 30 lakh penalty imposed on the company’s compliance officers in connection with the 2020 Facebook–Jio investment leak, according to Bar & Bench.

A Bench of Chief Justice of India Surya Kant and Justice Joymalya Bagchi held, "The issue dealt with by SEBI and SAT is substantially a question of fact, giving rise to no substantial question of law to be considered by court."

The case relates to a SEBI order dated June 20, 2022, which penalised RIL and two of its compliance officers, Savithri Parekh and K. Sethuraman, for allegedly failing to promptly disseminate unpublished price-sensitive information (UPSI) on Facebook’s proposed investment in Jio Platforms.

According to SEBI, discussions between RIL and Facebook had progressed through late 2019 and early 2020, leading to a non-binding term sheet on March 4, 2020, and subsequent due diligence. Binding documents were signed on April 21, 2020, with RIL announcing the Rs 43,574-crore deal on April 22, 2020.

However, on March 24, 2020, Reuters, the Financial Times and other outlets reported that Facebook was close to acquiring a 10% stake in Jio, triggering a sharp rise in RIL’s share price.

SEBI held that once the details of the proposed deal surfaced in the media during the UPSI period, Principle 4 of Schedule A to the SEBI (Prohibition of Insider Trading) Regulations, 2015 required RIL to disseminate accurate and clarifying information to ensure parity for investors.

RIL argued that Regulation 30(11) of the SEBI LODR Regulations, which deals with rumour verification, was discretionary at the time and did not require it to confirm or deny speculative reports unless asked by stock exchanges. The company also submitted that the information was not “concrete” or “credible” before the signing of binding documents and therefore did not constitute UPSI requiring disclosure.

On May 2, 2025, SAT dismissed RIL’s appeal and affirmed SEBI’s position, holding that the deal had reached a credible and concrete stage by late February 2020 and that media reports did not make UPSI “generally available” without company authentication. SAT concluded that RIL should have issued a clarification once the leak occurred.