“Camouflaged” disclosure is “No disclosure at all” – SAT
The Securities Appellate Tribunal (SAT) has ruled that if a material event disclosure is disclosed in a camouflaged manner then it can’t be considered as disclosure as per SEBI’s disclosure norms. SAT observed that burying crucial information in fine print defeats the very purpose of disclosure norms. SAT passed an order in the matter of Varun Beverages Limited (VBL) case.
In a detailed order dated January 9, 2026, the tribunal allowed an appeal filed by Tanzania Bottling Company S.A. (TBC) and set aside SEBI’s July 2, 2025 communication that had dismissed TBC’s complaint on the SCORES platform. The dispute stemmed from the termination of a share purchase agreement (SPA) under which VBL had agreed to acquire 100 percent of SBC Tanzania Ltd, a wholly owned subsidiary of TBC.
SAT noted that VBL had made a clear and prominent disclosure in November 2024 under SEBI’s disclosure norms, when its board approved the SPA. However, when the agreement failed to meet conditions set and stood terminated after the long-stop date, no equivalent disclosure was made. Instead, the termination was merely mentioned in a note to VBL’s unaudited financial results for the quarter ended March 31, 2025. SAT order noted, “A careful reading of disclosure Exhibit–D shows that VBL has disclosed about SPA in a conspicuous manner whereas, Annexure J resolution regarding unaudited financial results. Termination of SPA does not find place in the main minutes of the meeting. It is camouflaged in paragraph 9 of the notes appended to Exhibit J that too in small prints. In our view, this is no disclosure at all”.
