The Supreme Court has refused to admit Reliance Industries Limited’s appeal against a ruling that upheld a penalty for failing to promptly clarify market reports about the Jio Facebook stake sale. The decision effectively confirms the findings of the markets regulator, which held that the company and two of its compliance officers did not disclose unpublished price sensitive information in time.
During the hearing, the bench led by Chief Justice Surya Kant said, “The bigger the company, the greater the responsibility. You must meticulously comply with the regulations.” The court stated that there was no ground to interfere with the earlier ruling of the Securities Appellate Tribunal.
In June 2022, the markets regulator had imposed a total penalty of thirty lakh rupees on the company and two individuals, Savithri Parekh and K Sethuraman. The order said they failed to issue prompt clarification to the stock exchanges regarding reports of Facebook’s investment in Jio Platforms. The appellate tribunal upheld the penalty in May 2025.
The court noted that the issues examined by the regulator and the tribunal were matters of fact, and no substantial question of law was raised for further review. It also referred to the regulator’s findings under the insider trading regulations of 2015, observing that there was no need for interference.
Counsel for the company argued that it had complied with all rules and that there was no insider trading or unlawful gain. He said selective news leaks should not result in liability and that listed entities are not required to “verify, confirm or deny such market rumours.” In response, the Chief Justice said that when reports of a major investment emerge, a company should issue timely confirmation or denial because speculation can influence market price.
The regulator had earlier noted that media reports on the deal appeared in March 2020, while the company provided information to exchanges only on April twenty two, twenty twenty, which was twenty eight days later. The adjudicating officer held that the company and its compliance officers did not follow the principles of fair disclosure, which require making any selectively disclosed price sensitive information generally available.
The provisions under the disclosure rules allow listed companies to confirm or deny market reports. The regulator concluded that the company and the officials failed to issue the required clarification and therefore violated the code of practices for fair disclosure.
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