The Securities Appellate Tribunal (SAT) has held that disclosing material events in a camouflaged or fine-print manner cannot be treated as valid disclosure under SEBI’s listing regulations. The tribunal passed an order in the matter of Varun Beverages Ltd (VBL) case, saying that burying crucial information in fine print defeats the very purpose of disclosure norms.
In an order dated January 9, 2026, SAT allowed an appeal filed by Tanzania Bottling Company S.A. (TBC) and set aside SEBI’s July 2, 2025 communication that had rejected TBC’s complaint on the SCORES platform.
The tribunal has directed SEBI and the National Stock Exchange to re-examine whether the termination of a key transaction required mandatory disclosure under the LODR Regulations, and to pass fresh orders within four weeks.
SPA termination
The dispute relates to the termination of a share purchase agreement (SPA) under which Varun Beverages Ltd (VBL) had proposed to acquire 100 per cent of SBC Tanzania Ltd, a wholly owned subsidiary of TBC.
SAT said that VBL had made a clear and prominent disclosure in November 2024 when its board approved the SPA. However, when the agreement failed to meet stipulated conditions and stood terminated after the long-stop date, no equivalent disclosure was made to the stock exchanges. Instead, the termination was mentioned only in a note to the unaudited financial results for the quarter ended March 31, 2025.
Calling this approach unacceptable, the tribunal said the information was effectively buried in the fine print. “A careful reading shows that the SPA approval was disclosed in a conspicuous manner, whereas the termination does not find place in the main disclosure or board outcome. It is camouflaged in the notes, that too in small print. In our view, this is no disclosure at all,” the SAT order said.
The tribunal said that investor decisions and share prices depend heavily on timely and transparent disclosures about a company’s transactions, ventures and risks. Material events, it said, must be disclosed in a clear, conspicuous and standalone manner and not tucked away in annexures or explanatory notes.
Rejecting SEBI’s view that disclosures made on March 31 and April 30, 2025 were adequate, SAT said the regulator had failed to examine the issue in the right perspective. It also said that complaints raised by TBC on SCORES and the Market Intelligence platform were not properly considered.
Based on disclosures available on stock exchange websites, the Tanzania Revenue Authority treated the transaction as completed and initiated enforcement action, including freezing bank accounts. TBC was eventually compelled to pay capital gains tax of $4.26 million. The tribunal recorded that TBC had sought a formal confirmation of termination from VBL to resolve the matter with tax authorities, but did not receive one.