Adani Green Energy Case: How the insider trading case ended, know the whole story of one call

Adani Green Energy Insider Trading Case: Adani Group has got a big relief. Market regulator SEBI (Securities and Exchange Board of India) on Friday acquitted Pranab Adani, director of several Adani Group companies and nephew of big businessman Gautam Adani, of charges of sharing sensitive price information and violating insider trading rules.

SEBI has acquitted not only Pranab Adani but also his two other relatives. In this case, SEBI had issued notice to Pranab Adani, his sister’s husband Nripal Dhanapalbhai Shah and his cousin’s husband Kunal Dhanapalbhai Shah.

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What was the whole matter?

The case in which SEBI has given clean chit to Pranav Adani and his relatives was whether Pranav Adani had shared confidential and price-sensitive information related to the acquisition of SB Energy before it was made public.

SB Energy was acquired by Adani Green. To investigate this, SEBI examined the transactions of Adani Green Energy shares between January 28, 2021 and August 20, 2021.

After reviewing the investigation report in November 2023, SEBI determined that there may be a violation of insider trading rules in this case and issued a show cause notice to Pranab Adani, Kunal Dhanpalbhai Shah and Nirupal Dhanpalbhai Shah on November 10, 2023.

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What did the investigation reveal?

SEBI conducted a thorough investigation of the matter. SEBI did not find any evidence to show that Pranab Adani had shared any confidential information or that the Shah brothers had traded shares on the basis of insider information.

In its 50-page order, SEBI said that the call made to Pranav on May 16, 2021 was not to share any confidential information. Kunal and Nirupal had transacted the shares based on their understanding rather than being influenced by any confidential information.

An important part of this case was a phone call made by Kunal to Pranav Adani on May 16, 2021, in which SEBI believed that confidential information was shared.

However, during investigation, SEBI came to know that the information about the acquisition of SB Energy had already appeared in the news on that day before this call. It is worth noting that on May 19, 2021 at 08:20:21 am, Adani Green Energy announced that it has entered into share purchase agreements with SoftBank Group and Bharti Global for the acquisition of SB Energy.

Since SEBI found that no insider information was used in the share transactions, no penalty was imposed or any directions were issued. Along with this, SEBI abolished the show-cause notice issued in November 2023, thereby closing the case.

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