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The country’s market regulating agency has slapped a fine on one of the largest conglomerates in the country, Reliance Industries. This is due to the fact that the company has gone against the disclosing of details terms and conditions of a deal that they closed 2 years ago.
2 years ago, back in 2020, Facebook injected a colossal investment of $ 5.7 billion USD in to Reliance Industries. This was to ensure that that their sister company, WhatsApp could enter the fintech world by enabling unified payments interface on the app. Users of WhatsApp can now pay to small business by just using WhatsApp’s payment feature.
This deal worked great for Reliance Industries as well as the group was able to cancel out a huge chunk of debt which was creeping up on the company.
The Securities and Exchange Board of India (SEBI) in a public statement said that the people of Reliance Industries did not update the public and the press about the done deal even after it was done. This caused the media companies to constantly talk about and hype up the deal that is set to be complete soon which caused the share price of Reliance Industries and related companies to soar during that period.
SEBI has clearly said that withholding critical and sensitive information, especially one like an investment should be revealed to the public and the press as they are a publicly listed company and all share holders and potential share holders should have the information, they can have access to, to make a right and informed choice about their investments. The group has manipulated the market and the people responsible of this should face the consequences.
When parts of the done deal were circulating among news media and the public, the company and its spokes people should have come clean and announced that the deal has been done. However, they feigned responsibility and never said anything of the matter.
SEBI went on to say that it was time for Reliance Industries to clarify to the people and media once parts of the deal was floating around the public which hadn’t even been verified yet.
Reliance industries and two of their officers have since been fined $ 38,522 USD (30 lakh rupees). However, for a company like Reliance Industries which deals with money in the billions of dollars this fine seems like some back pocket change.
