The 2020 deal pertaining to stake sales in RIL’s subsidiary company, Jio Platforms to Facebook, Silver Lake and Vista Equity Partners, was disclosed through the newspapers rather than the stock exchange
Markets regulator SEBI on Monday slapped a Rs 30 lakh fine on Mukesh Ambani-owned Reliance Industries Ltd (RIL) and two of its compliance officers for not making prompt disclosure of the Jio-Facebook deal to the stock exchange. The 2020 deal pertaining to stake sales in RIL’s subsidiary company, Jio Platforms to Facebook, Silver Lake and Vista Equity Partners, was rather disclosed through the newspapers.
What SEBI said in its order against Reliance
SEBI, in its order, said that the penalty needs to be paid “jointly and severally” by Reliance and the two individuals “within 45 days”. During its investigation, the market regulator gathered that a lot of news came around Facebook investing in Jio in the month of March and April 2020, prior to the corporate announcement made on April 22, 2020.
SEBI said it observed that the first news about the 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 the next day as well.
The regulator further stated in its order that the news reports, inter-alia, said 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 the publication of said news reports, the scrip price of the company jumped by almost 15 per cent on March 25, 2022, SEBI added.
The regulator stated that prior to the corporate announcement of the Jio-Facebook deal by Reliance, many news articles appeared in the media. It added that any information which is UPSI (unpublished price sensitive information) should be enveloped until made public, and should be made public for all and not selectively.
RIL-SEBI run-ins in the past
This is not the first time, Reliance has had a run-in with the SEBI over its corporate governance practice.
Earlier in January this year, the SEBI had fined Reliance and Mukesh Ambani Rs 25 crore and Rs 15 crore, for allegedly conducting manipulative trades in Reliance Petroleum Ltd. (RPL) in 2007.
In April this year, the regulator also imposed a penalty of Rs 25 crore on Mukesh Ambani, Nita Ambani, Anil Ambani, Tina Ambani and companies linked to the Ambanis for alleged violation of the takeover code regulations in 2000.
The order which came after 20 years, pertained to an increase in the promoter stake of RIL in January 2000, following the conversion of some warrants issued as early as 1994. SEBI alleged that the promoter group failed to make an open offer as required under the rules.