Reliance Industries news: Sebi slaps Rs 30 lakh fine on Reliance Industries, 2 others

Mumbai: The Securities and Exchange Board of India (Sebi) has imposed a penalty of 30 lakh on Reliance Industries Limited (RIL) and two of its compliance officers, Savithri Parekh and K Sethuraman, for not promptly disclosing the stake sales in its subsidiary company, Jio Platforms to Facebook, Silver Lake and Vista Equity Partners in 2020.

In 2010, RIL made three separate announcements in April and May about Facebook investing 43,574 crore in Jio Platforms for a 9.99% stake, Silver Lake investing 5,655 crores in Jio Platforms for a 1.15 % stake and Vista Equity investing 11,367 crore in a subsidiary company for a 2.32% stake.

“During the investigation, it was gathered that there was lot of news flow around Facebook investing in Jio in the month of March and April 2020 prior to the corporate announcement made 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,” Sebi said in its order on Monday.

“The news articles, inter-alia, stated that Facebook is seeking to buy a multibillion-dollar stake in Reliance Jio, Facebook was close to signing a preliminary deal for a 10% share in Jio, a deal with Facebook was due to be announced in March end, coinciding with the end of the Indian financial year. Post publication of said news articles, the scrip price of the Company went up by almost 15% on March 25, 2020,” Sebi said.

The regulator said there were many other news articles that appeared in the media relating to the Jio-Facebook deal prior to its corporate announcement by the company.

Sebi said information which is UPSI (unpublished price sensitive information) should be enveloped until made public. It should be made public for all and not selectively, the regulator said.

“It was observed that with regard the above, Noticees 1, 2 & 3 (RIL, Parekh & Sethuraman respectively) did not comply with the provision of principles of fair disclosure of UPSI (Unpublished Price Sensitive Information) which states that there should be prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available and did not issue any clarification on the same, as required under Regulation 30(11) of SEBI (LODR) Regulations, 2015 which states that the listed entity may on its own initiative also, confirm or deny any reported event or information to stock exchanges,” Sebi said.