SAT Mumbai: Termination of SPA in Financial Notes is 'No Disclosure' Under SEBI Regulations
The Securities Appellate Tribunal (SAT) held that termination of a Share Purchase Agreement, when camouflaged in the notes appended to financial results and not disclosed in the main minutes of the board meeting, amounts to no disclosure at all under the SEBI (LODR) Regulations, 2015.
Tanzania Bottling Company (TBC) has successfully challenged SEBI's dismissal of its complaint against Varun Beverages Limited (VBL), alleging that a 'camouflaged' disclosure regarding a terminated deal led to a $4.26 million tax penalty. The Tribunal ruled that hiding a deal's termination in the fine print of financial notes—rather than declaring it in the main Board Meeting minutes—amounts to 'no disclosure' at all.
A coram of Presiding Officer P.S Dinesh Kumar and Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar allowed the appeal filed by Tanzania Bottling Company S.A., challenging SEBI's rejection of its complaint against Varun Beverages Limited.
“The TBC has made a complaint on SCORES which has not been considered in the right perspective. Similar is the fate of complaint made on the Market Intelligence platform. The stand taken by both SEBI and VBL are wholly untenable and this appeal eminently merits consideration.” It held
The case related to TBC, which entered into a share purchase agreement with VBL in November 2024, under which VBL agreed to acquire 100% shareholding of SBC Tanzania Limited, a subsidiary of TBC. The transaction was disclosed by VBL on the exchange websites.
The agreement later stood terminated as certain conditions were not fulfilled before the deadline. Although VBL made further disclosures in March and April 2025, termination of the agreement was mentioned only in a note to the financial results.
TBC filed a complaint because Varun Beverages' failure to formally disclose the deal's termination led the Tanzania Revenue Authority to believe the deal was still on or handled improperly, resulting in TBC being forced to pay USD 4.26 million in taxes.
According to TBC, due to the absence of a proper disclosure regarding termination of the agreement, the Tanzania Revenue Authority initiated tax proceedings and compelled TBC to pay USD 4.26 million. TBC lodged a complaint on the SEBI-SCORES platform alleging failure to make proper disclosures under the SEBI (LODR) Regulations, 2015, which was dismissed by SEBI.
Aggrieved by the dismissal order and seeking a direction to VBL to make appropriate disclosures regarding termination of the agreement, TBC filed the present appeal.
SEBI argued that VBL had already made sufficient disclosures in March and April 2025 and that no further disclosures were required.
The Tribunal observed that while VBL had disclosed execution of the agreement clearly, the termination of the agreement did not find place in the main minutes of the meeting.
“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. “ It observed
Accordingly, the Tribunal allowed the appeal, set aside SEBI's rejection order, and directed SEBI and the National Stock Exchange of India to re-examine the issue and pass appropriate orders within four weeks.
Case Name: Tanzania Bottling Company S.A v. Securities Exchange Board of India and Ors
Case Number: Appeal No. 519 of 2025
Citation: 2026 LLBiz SAT 1
For Appellant: Senior Advocate Pesi Modi and Advocates Kalpana Desai, Vinay Chouhan, Ashwin Gowda, Khush Padmsi, Vedica Gaggar and CS Muskan Kadiwar
For Respondents: Advocates Vishal Kanade, Prapti Kedia, Sanskriti Sharma, Ishan Agrawal, Kush Khandelwal, Ashutosh Mishra, Divakar Dadhich, Anshal Dhiman, Rutu Gandhi and Aniruddh Gambhir