The Securities Appellate Tribunal (“SAT”) vide its order in Tanzania Bottling Company S.A v. Securities and Exchange Board of India, (Appeal No. 519 of 2025, decided on January 9, 2026) held that Varun Beverages Limited’s (“VBL”) disclosure of termination of a share purchase agreement ("SPA") was camouflaged in the notes to the financial results which did not amount to a disclosure under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”).

BRIEF FACTS

Tanzania Bottling Company S.A. ("TBC") entered into a SPA dated November 13, 2024 with VBL, a listed entity on Indian stock exchanges, whereby VBL agreed to acquire 100% (hundred percent) shares in SBC Tanzania Limited, a wholly owned subsidiary of TBC.

On March 27, 2025, TBC informed VBL that certain conditions precedent (“CPs”) under the SPA were unlikely to be met before the long stop date and that, on such non-compliance, the SPA shall stand terminated as per the terms of the SPA. VBL made a disclosure on March 31, 2025 to the stock exchanges (“March 31 Disclosure”) stating that the long stop date had approached while certain CPs were yet to be completed and no extension of long stop date had been signed yet. VBL also stated that they would immediately inform the stock exchanges of any further development. Subsequently, TBC sent a letter confirming the termination of the SPA. Such further development regarding termination of the SPA was not intimated to the stock exchanges, but on April 30, 2025 (“April 30 Disclosure”), VBL made a disclosure to the stock exchanges stating that VBL's board had approved unaudited financial results of VBL for the quarter ended March 31, 2025 (“Financial Results”). In note No. 9 appended to the Financial Results, termination of the SPA was mentioned. TBC lodged a complaint on the SEBI SCORES portal (“SCORES Portal”) and SEBI's ‘Market Intelligence’ portal against VBL. On July 2, 2025, SEBI dismissed TBC’s complaint on the SCORES Portal (“SEBI Order”). Thereafter, TBC approached SAT seeking to set aside the SEBI Order.

ISSUE

The primary issue to be decided was whether the March 31 Disclosure and April 30 Disclosure were sufficient disclosures as per Regulation 30(1) of SEBI LODR.

DECISION

SAT observed that under SEBI LODR, an entity is required to make disclosure of a material event or information. It also noted that VBL had earlier disclosed the SPA itself in a conspicuous manner. Against that backdrop, SAT compared the earlier disclosure of the SPA with the later manner in which the termination was disclosed. SAT observed that share prices depend largely upon investors' assessment of company's prospects and such assessment depends upon information disclosed by the listed entities about Company's financials, proposed ventures, collaborations etc. SAT noted that in so far as the termination of the SPA was concerned, it was not mentioned in the main minutes of the meeting but was “camouflaged” in paragraph 9 of the notes appended to the Financial Results, and that too in small prints. This, in the opinion of SAT, was “no disclosure at all”.

Thus, SAT set aside the SEBI Order and directed SEBI and National Stock Exchange to re-examine the subject matter of mandatory disclosure under SEBI LODR and pass appropriate orders.

Please find attached a copy of the Judgment, here.

This update has been contributed by Adity Chaudhury (Partner) and Anoushka Mani (Associate).

Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.