SEBI imposes a penalty Rs. 30 Lakhs on Reliance for failure to disclose price sensitive investment details
The penalty imposed by SEBI is yet another instance of its regulatory censure.
The Securities and Exchange Board of India on 20 June 2022 imposed a penalty of Rs. 30 lakhs on Reliance Industries limited and its two compliance officers Savithri Parekh and K. Sethuraman for failing to disclose the information about the stake sales in one of its units to Meta Platforms Inc., Silver Lake Partners and Vista Equity Partners in 2020.
SEBI initiated proceedings against RIL and the two compliance officers for violating fair disclosure norms about unpublished price-sensitive information.
It was found that in April 2020, Meta’s Facebook invested 5.7 Billion in Reliance Jio Platforms to allow WhatsApp to offer payment services to millions of small businesses.
However, SEBI took note that Reliance failed to reveal the details of the said investment despite newspaper reports in 2020 regarding price-sensitive details about the imminent investment made by Facebook which lead to a share price hike.
“When the bits of (unpublished price-sensitive information) that then became selectively available the company abdicated its responsibility to verify and come clean on the unverified information that was floating around,” SEBI said in its order late on Monday.
SEBI said it was “incumbent” on Reliance to provide “due clarification on its own” once it knew about the “selective availability” of the information.