Meta’s Facebook invested $5.7 billion in Reliance’s Jio Platforms in April 2020, intending to allow WhatsApp to facilitate payments to millions of small companies. Reliance Industries, owned by billionaire Mukesh Ambani, was able to reduce its huge debt load as a result of the deal.
Reliance Industries and two of its compliance officers were penalised by India’s market regulator on Monday for violating fair disclosure norms during Facebook’s $5.7 billion investment in its digital unit in 2020.
Reliance did not disclose the arrangement, according to the Securities and Exchange Board of India (SEBI), even after price-sensitive details about the impending investment were published in press headlines in March 2020, causing its stock to spike. 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“When the bits of (unpublished price-sensitive information) that then became selectively available the company abdicated its responsibility to verify and come clean on the unverified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.