SEBI penalises RIL, compliance officers for delayed disclosures

The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of ₹30 lakh on Reliance Industries and its compliance officers – Savithri Parekh and K Sethuraman – for alleged delay in disclosing information related to Facebook, Silver Lake and Vista Equity Partners buying stake in Jio Platforms.

According to the capital markets regulator, even while there was much news flow regarding Facebook purchasing a 9.99 per cent stake in Jio Platforms, the company formally made an announcement only on April 22, 2020.

“It was observed that the first news about impending Jio-Facebook deal was published in the Financial Times (FT), London on March 24, 2020, post-market hours and thereafter, the said news report of FT was widely circulated in Indian media on the same day and next day,” stated the SEBI order.

“It was observed that with regard the above, Noticees… did not comply with the provision of principles of fair disclosure of UPSI (Unpublished Price Sensitive Information) which states that there should be prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise…” it added.

“I find that the news pertaining JIO Facebook deal came out on March 24 and 25, 2020 and the information to the stock exchanges about the media release titled “Facebook to Invest ₹43,574 crore in Jio Platforms for a 9.99% Stake” was made on April 22, 2020, i.e. after 28 days and this calls for an appropriate penalty,” stated the order.

The SEBI order further highlighted the fact that there was a 15 per cent jump in the stock price of RIL on March 25 – a day after FT reported that Facebook is eyeing a stake in Jio Platforms.

Hence it was considered as price sensitive information, it said.

Interestingly, post the official announcement on April 22, the stock rose only around 10 per cent – lower than the rise of March 25.

“There are basically two fundamental premises. One that information which is UPSI should be enveloped until made public. Second that if information needs to be made public then it should be made public for all and not selectively,” said the SEBI order.