Jio-Facebook Deal: SAT To Hear Reliance’s Appeal Against SEBI Penalty On Oct. 31
The Securities Appellate Tribunal will hear Reliance Industries Ltd.'s plea against a penalty levied by SEBI for not promptly clarifying the Jio-Facebook deal that surfaced through newspapers on Oct. 31.
The appellate tribunal had earlier stayed the market regulator's order.
In June 2022, the Securities and Exchange Board of India imposed a penalty of Rs 30 lakh on Reliance and two of its compliance officers, K. Sethuraman and Savithri Parekh, for not properly clarifying Facebook's investment in Jio, despite reports in several foreign and Indian newspapers. This is in violation of several SEBI regulations, including its listing regulations.
Reliance failed to provide timely clarifications about a deal between Reliance's Jio and Facebook, which appeared in the Financial Times, according to the regulator. A news item regarding the impending transaction appeared on March 24 and 25, 2020, whereas no clarification was provided until April 22, 2020, nearly a month after the news item, SEBI said. This, according to the regulator, warranted a penalty.
Facebook subsequently acquired a 9.99% stake in Jio Platforms Ltd. in April 2020 for Rs 43,574 crore.
Reliance as well as its compliance officers had an obligation to promptly disseminate undisclosed price-sensitive information that gets disclosed selectively or inadvertently under the regultor's listing requirements, according to SEBI. However, according to Reliance, they are not bound to disclose such information, as it is the listed entity's discretion whether to verify such a reported event or not.
SEBI recently made it mandatory for listed entities to promptly confirm or deny market rumours concerning them in mainstream media. The requirement, which was initially set to be implemented from Oct. 1, 2023, has now been pushed to a later date.
The top 100 companies by market capitalisation will now have to verify market rumours from Feb. 1, 2024, and the top 250 listed companies from of Aug. 1, 2024.
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