SEBI fines RIL, officials 3 mln rupee for insider trading norm breach

20 Jun 2022

The Securities and Exchange Board of India today fined Reliance Industries Ltd and two compliance officers of the company 3 mln rupees for breach of insider trading regulations.

In its order, SEBI said that unpublished price sensitive information pertaining to a likely deal between Facebook and Jio Platforms was not clarified upon by Reliance Industries for nearly a month after the media first reported it on March 24 and March 25, 2020.

The media report had said that Facebook was seeking to buy a multi-billion dollar stake in Reliance Jio and that it was close to signing a preliminary deal.

On April 22, 2020, Reliance Industries made a formal announcement that Facebook was investing 435.7 bln rupees in Jio Platforms for 9.99% stake.

SEBI held that the insider trading norms imposed an obligation on Reliance Industries to clarify on the matter when the deal got reported upon in March since it was a price sensitive information. But the company failed to take initiative in issuing any clarification and committed a breach.

Reliance Industries contended before SEBI that at the time of the media reportage in March the due diligence was still going on and there were only tentative agreements on valuations. It told SEBI that since no credible and concrete information had got created at that time no obligation was cast upon it to suo moto clarify on the media report.

The penalty of 3 mln rupees will have to be paid jointly and severally by Reliance Industries and two compliance officers, the SEBI order said.