Products You May Like
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 (nearly Rs. 44,400 crore) investment in its digital unit in 2020.
In April 2020, Meta‘s Facebook invested $5.7 billion in Reliance‘s Jio, 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“When the bits of (unpublished price-sensitive information) that then became selectively available the company abdicated its responsibility to verify and come clean on the unverified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 Rs. 3 million on Reliance and the two compliance officers.
Last year, it was reported that India’s conglomerate Reliance Industries has partnered with Facebook, Google, and fintech player Infibeam to set up a national digital payment network. In 2020, India’s central bank invited companies to forge new umbrella entities (NUEs) to create a payments network that would rival the system operated by the National Payments Council of India (NPCI), as it seeks to reduce concentration risks in the space.
Citing three unnamed sources, the report said that the group led by Reliance and Infibeam was in the advanced stages of submitting their proposal to the Reserve Bank of India.
A spokesperson for Infibeam declined comment on the report, saying the company was bound by the confidentiality of process, while Reliance, Google, and Facebook did not immediately respond to a request for comment.
© Thomson Reuters 2022