The fine line between gossip and truth: conflicting rulings on price sensitive information disclosure
– Saloni Khant, Executive | corplaw@vinodkothari.com
If there is a truth that the market needs to know, it is the duty of the company to let the market know it, no later than the truth becomes good for disclosure. It is no good for the company to sit smirking and watch unofficial media reports do rounds, even if these unofficial reports are as close to the truth as the company would have revealed. The duty to reveal does not get over with seeing the truth out through unofficial means. In fact, that raises even a larger concern: one, that the company failed its duty to speak the truth, and two, if the company did not reveal it, how did the market know it, and know almost the whole of the truth.
This is the law that we learnt and believed. This is the law that the SC in its December 2, 2025 ruling laid. This is the law that was reinforced by a clear language specifically amended vide the SEBI (PIT) (Amendment) Regulations, 2024.
However, insider trading matters always tend to become so very case-specific that every case seems to say a different story. Some cases tell a story that one may not like to carry or use as a precedent, for example, the order dated December 12, 2025 by the Quasi-Judicial Authority, SEBI, in the matter of a large listed entity.
In this article, we discuss what would be construed as “unpublished”, hence, UPSI, in the light of the recent SC order vis-a-vis recent and past rulings of SEBI on the subject.
Meaning of UPSI
The definition of UPSI, as given under Reg 2(1)(n) of the PIT Regulations, 2015, contains the following elements:
(i) There is an information
(ii) The information relates to the company or its securities, directly or indirectly
(iii) The information is not generally available, that is, unpublished.
(iv) The information is likely to materially affect the price of the securities upon becoming generally available, that is, price-sensitive.
A list is also given, of information that would ordinarily be considered UPSI.
Thus, in order to be construed as UPSI, both “unpublished” and “price-sensitivity” shall be present. In the absence of one of these, the information does not remain UPSI. In order to qualify as “unpublished”, the same shall not be “generally available information”.
Generally available information and unverified media reports
Generally available information is defined under Regulation 2(1)(e) as
“Information that is accessible to the public on a non-discriminatory basis and shall not include unverified event or information reported in print or electronic media.”
The phrase “shall not include unverified event or information reported in print or electronic media” was inserted pursuant to the SEBI (PIT) (Amendment) Regulations, 2024 following the Consultation Paper dated December 28, 2023.
The CP pertained to verification of market rumours, and proposed that:
In case the listed entity has classified certain information as UPSI and the entity neither confirms, denies or clarifies market rumour pertaining to such information published in the media, then such media reports should not be used later by an insider as a defence that the information was ‘generally available’.
Thus, an unverified media report does not constitute “generally available information”.
Verdict of Supreme Court
In its order dated December 2, 2025, the Supreme Court upheld a penalty of Rs. 30 lakh on a listed entity for non-disclosure of UPSI to the stock exchange when the information had already been widely disseminated by news agencies. It upheld that
‘Selective leakage of the information, howsoever accurate or otherwise or complete or in bits and pieces, does not discharge the company from its responsibility of making prompt disclosure to make it generally available, more so when such information has been classified by company as UPSI.’
Recent Order passed by SEBI contrary to SC’s verdict
In a later order dated December 12, 2025, the charges against the alleged insiders were leakage of UPSI and trading while in possession of UPSI. The alleged UPSI in the instant case was acquisition of a company in the same sector which would lead to a major increase in operational capacities. The Company disclosed the same officially only on execution of the share purchase agreement on May 19, 2025, while several press reports appeared about the very same news on May 16, 2025 and May 17, 2025. In its order, the Quasi Judicial Cell (QJC) , SEBI dropped charges against the company primarily on the ground that the “news” was already in public domain. The QJC has reproduced extracts from several such media reports, none of which were based on a disclosure made by the company. Based on these reports, QJC held that the information “ceased to be UPSI as it was available on non- discriminatory basis and became generally available information after the publication of the news reports”. The QJC cited several past rulings to support its view, even though, before the QJC order dated December 12, 2025, rulings of SAT as also the December 2, 2025 ruling of SC were also available, and not cited in the QJC Order.
Is this order one of its kind, or does it serve as a precedent? If it serves as a precedent, then it seems to be unsettling the law, apparently settled after the specific amendment made in May 2024.
We take note of the various rulings in the matter.
A. Rulings favouring unverified media reports as “unpublished” or “selectively available” information
In a February 2021 order, SEBI held that statements made by the Chairman/ Managing Director of a company in response to an interview to select news channels does not result in making an information “generally available”. This was based on the reason that:
“The said information was very fluid and nebulous as it was bereft of specific details as to how this restructuring will ultimately be executed. Questions and response to the questions posed during the interview were varied and did not contain all the information in uniform/structured manner.”
In a November 2020 order, it was observed that news reports about an UPSI without any specific details and supporting evidence for its contents does not result in making that UPSI generally available.
In a June 2020 order, SEBI, referring to the definition of “unpublished” under the 1992 Regulations, held that media reports are speculative in nature, and hence, unless published by the Company, cannot be treated as published information.
B. Rulings favouring unverified media reports as “generally available” information
The recent December 12 order of SEBI draws reliance on various past rulings on the subject. The same has been briefly discussed below.
An appeal against a SEBI order, back in 1998, decided by the then Appellate Authority (erstwhile Ministry of Finance) observed:
“For information to be generally known, it is not necessary that it be confirmed or authenticated by the company as otherwise, it would fall within the scope of ‘published by the company.
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Information which was published in press reports despite non -acknowledgement by the Company, was generally available/ known information if ‘there are strong reasons to believe that the impending merger, though not formally acknowledged or published, was in one sense generally known and UTI’s denial of knowledge cannot be implied to mean that market in general had no information in this regard.”
This order attempted to distinguish between “unpublished” and “generally available” information. However, following the said order, the 1992 Regulations were amended by a 2002 amendment to clarify that – “Speculative reports in print or electronic media shall not be considered as published information”.
In a December 2023 order of SAT where the information in relation to a proposed merger became available in public domain through news articles, digital media, etc, such media-published information was considered as making the information “generally available”.
“Thus, the contention of the respondent that the term “generally available information” means only the information which has been disseminated on the platform of the stock exchange is taking a very narrow and restrictive view. Whereas information published on the stock exchange would constitute generally available information, it would also follow that any information accessible to the public on non-discriminatory basis would also be generally available information.
Thus, publication of information regarding the transaction which was reported in multiple prince and digital publication including Economic Times, The Hindu Business, Business Lines, The Money Control, etc. wherein the nature of transactions was highlighted in depth clearly leads to an irresistible conclusion that information of the transaction was generally available”.
A similar view was taken by SEBI in an October, 2020 order where based on the wide viewership of the media, the UPSI was considered to become generally available.
In a January 2018 order, SEBI held that UPSI related to receipt of a show cause notice becomes public from the date of its publication in a specific newspaper.
Leakage of UPSI
Parallel to the disclosure requirements applicable on the company, the leakage of UPSI through media reports also require companies to do an inquiry into the source of the leakage, and review of the internal processes to monitor and avoid any future instances of leakage of UPSI.
Conclusion
Despite the above QJC Order, we are of the view that the duty to make truthful disclosure is that of the company; the company cannot either remain silent, or treat media gossip as the revelation of truth. As Manusmriti 2.83 says: मौनात् सत्यं विशिष्यते.
Author’s Comment:
The facts of the case in the 12th December ruling of SEBI pertain to a matter in 2021. The mandatory requirements with respect to rumour verification were first notified in 2023, with subsequent extension of dates to its applicability. Amendments in the definition of “generally available” information were also notified in May 2024. As such, the ruling is based on the position of law prior to such amendments, and is based on the views taken by SEBI and SAT in similar other matters.
We understand that every quasi judicial decision is based on the facts of the matter, application of the law on the specific factual matrix, etc. In the instant case, the issue under consideration might have been whether, after the press releases precisely giving out the details of the matter, would there have been any additional information by the company, even if the company was to give its own disclosure.
Our other Resources:
Also PIT Regulations allow if UPSI is published in media it becomes generally available. LODR regulations contradict PIT Regulations and there is no definition of UPSI and generally information in LODR Regulations. Hence your views are not correct.