Regstreet Law Advisors represented Kunal Shah and Nrupal Shah before SEBIโs Quasi-Judicial Authority in proceedings alleging insider trading in the scrip of Adani Green Energy Ltd. (AGEL) under the SEBI Act, 1992 and the SEBI (Prohibition of Insider Trading) Regulations, 2015. The matter was led by Sumit Agrawal, Founder & Managing Partner, along with Abhineet Pange, Partner, Kavish Garach, Senior Associate, and Mahima Jayan, Associate.
SEBI has passed a final order fully exonerating all noticees, dropping all allegations with no penalties or adverse directions. The case arose from trades linked to AGELโs acquisition of SB Energy Holdings Limited, which SEBI alleged to be UPSI.
๐๐๐ฒ ๐ ๐ข๐ง๐๐ข๐ง๐ ๐ฌ ๐จ๐ ๐๐๐๐
After examining the records and submissions, SEBI held that:
1. ๐๐ญ๐๐ง๐๐๐ซ๐ ๐จ๐ ๐๐ซ๐จ๐จ๐ ๐ข๐ง ๐๐ง๐ฌ๐ข๐๐๐ซ ๐๐ซ๐๐๐ข๐ง๐ ๐๐๐ฌ๐๐ฌ: Insider trading charges, being quasi-criminal in nature, require a high preponderance of probabilities, which was not met in the present case.
2. ๐๐ง๐๐๐ซ๐ญ๐๐ข๐ง๐ญ๐ฒ ๐๐ซ๐จ๐ฎ๐ง๐ ๐๐๐๐ ๐๐ง๐ ๐๐ญ๐ฌ ๐๐ซ๐ฒ๐ฌ๐ญ๐๐ฅ๐ฅ๐ข๐ฌ๐๐ญ๐ข๐จ๐ง: SEBI held that the SCN was inconsistent on when the alleged UPSI arose and reiterated that, in M&A transactions, UPSI does not arise from preliminary discussions but only upon crystallisation of the transaction.
3. ๐๐ง๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง ๐๐ฏ๐๐ข๐ฅ๐๐๐ฅ๐ ๐๐ก๐ซ๐จ๐ฎ๐ ๐ก ๐๐๐๐ข๐ ๐๐๐ฉ๐จ๐ซ๐ญ๐ฌ: SEBI noted that prior media reports had already disclosed substantive details of the proposed acquisition on a non-discriminatory basis, and the investigation failed to show what material information remained unpublished thereafter.
4. ๐๐๐ฌ๐๐ง๐๐ ๐จ๐ ๐๐ฏ๐ข๐๐๐ง๐๐ ๐จ๐ ๐๐จ๐ฆ๐ฆ๐ฎ๐ง๐ข๐๐๐ญ๐ข๐จ๐ง ๐จ๐ซ ๐๐จ๐ฌ๐ฌ๐๐ฌ๐ฌ๐ข๐จ๐ง ๐จ๐ ๐๐๐๐: SEBI found that no direct or cogent evidence existed to establish communication of UPSI and held that frequent telephonic contact and familial relationships, by themselves, are insufficient to prove possession of UPSI.
5. ๐๐ฎ๐ซ๐๐๐ง ๐ญ๐จ ๐๐ฌ๐ญ๐๐๐ฅ๐ข๐ฌ๐ก ๐ ๐จ๐ฎ๐ง๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ฅ๐๐ฆ๐๐ง๐ญ๐ฌ: SEBI concluded that the foundational burden of proving possession or access to UPSI at the time of trading was not discharged.
In light of these findings, SEBI dropped the proceedings in full, exonerating all noticees and reaffirming that insider trading charges must be based on clear, cogent evidence – not conjecture or association.
๐๐ณ๐ฅ๐ฆ๐ณ ๐ญ๐ช๐ฏ๐ฌ: https://lnkd.in/gA66uV3q
๐๐ฐ๐ณ ๐ง๐ถ๐ณ๐ต๐ฉ๐ฆ๐ณ ๐ค๐ฐ๐ฏ๐ต๐ฆ๐น๐ต: https://lnkd.in/gsi_6K7b
