• SEBI fines Reliance for not promptly disclosing Facebook deal

    Savithri Parekh and K Sethuraman, two of Reliance's compliance officers, are also included in the penalty.

    Digital Desk: The Securities and Exchange Board of India (SEBI) fined Reliance Industries 30 lakhs ($38,522) for allegedly breaking Prohibition of Insider Trading (PIT) regulations.

    Savithri Parekh and K Sethuraman, two of Reliance's compliance officers, are also included in the penalty. The sanction was levied by SEBI, India's market regulator, for Reliance's failure to quickly disclose Facebook's $5.7 billion investment in Reliance's Jio Platforms in April 2020.

    Before the investment, other media sites such as the Financial Times had previously reported on the deal, causing Reliance's stock to soar 15%. As a result, it was classified as "unpublished price sensitive information" (UPSI). Later on, Reliance failed to disclose or clarify the investment, and stock markets did not ask Reliance for clarification.

    When Reliance heard that the information was set to be published, it was "incumbent" on it to clarify Facebook's multi-million-dollar commitment to buy a 9.99 percent interest in Jio, according to SEBI. The transaction was valued at Rs 43, 574 crores. The funding allows WhatsApp, the popular messaging service, to offer payment services to millions of small companies. This acquisition, according to SEBI, assisted Reliance in reducing its hefty debt load.

    Other firms, including Silver Lake and Vista Equity, have invested in Jio. Silver Lake invested Rs 5,655 crores for a 1.15 percent share in Jio Platforms, while Vista Equity invested Rs 11,367 crores for a 2.32 percent stake.

    According to SEBI, there is no quantitative data to measure the disproportionate gain or unfair advantage gained as a result of the notice's defaults. It claimed that the notices (from Reliance, Parekh, and Sethuraman) did not follow UPSI's principles of fair disclosure.

    It states that there should be "prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently, or otherwise to make such information generally available" and that it "did not issue any clarification on the same, as required under Regulation 30(11) of the SEBI (LODR) Regulations, 2015, which states that the listed entity may confirm or deny any reported event or information to stock exchanges on its own initiative."

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