Reliance fined for violating disclosure rules in 2020 Facebook deal

India’s market regulator on Monday fined Reliance Industries and two of its compliance officers for violating fair disclosure norms during Facebook’s $5.7 billion investment in its digital unit in 2020.

In April 2020, Meta’s Facebook invested $5.7 billion in Reliance’s Jio Platforms, aiming to allow WhatsApp to offer payments services to millions of small businesses. The deal helped billionaire Mukesh Ambani’s Reliance slash its heavy debt load.

The Securities and Exchange Board of India (SEBI) said Reliance did not disclose the deal even after newspaper reports in March 2020 published price-sensitive details about the imminent investment that led to a spike in its shares.

Reliance did not immediately respond to requests for comment outside regular business hours.

“When the bits of (unpublished price-sensitive information) that then became selectively available the company abdicated its responsibility to verify and come clean on the unverified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.

The regulator imposed a penalty of 3 million Indian rupees ($38,522) on Reliance and the two compliance officers.