SC underlines requirement for firms to disclose material info

The Supreme Court on Tuesday upheld a $30 lakh penalty imposed by the Securities and Exchange Board of India (SEBI) on Reliance Industries Ltd (RIL) and two of its senior compliance officers for failing to promptly disclose information regarding Facebook's 2020 investment in Jio Platforms, emphasising that market integrity demands transparency from major corporate players.

- Utkarsh Anand

A bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi dismissed RIL's challenge toa May 2, 2025, order of the Securities Appellate Tribunal (SAT), which had affirmed SEBI's findings of delayed disclosure. The top court stressed that when news of a deal of such magnitude surfaces and has the potential to sharply influence stock prices, the company involved cannot remain silent.

“If unconfirmed media reports also impact your business, you are bound to disclose such information,” the bench told RIL's counsel, senior advocate Ritin Rai, during the hearing. “These are components of ethical values and in such matters, there cannot be any leniency or relaxations. If you are a big entity, the onus is bigger. You must meticulously comply with all regulations,” it added.

The court took note of the circumstances surrounding the March 24, 2020 report published in the Financial Times, which revealed that Facebook was close to acquiring a 10% stake in Jio Platforms.

Domestic media amplified the development within hours, leading to a 15% rise in RIL shares. Yet, the firm issued no state-