Sebi accuses Adani's nephew in insider trading case, settlement talks on

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India's markets regulator has alleged Pranav Adani, director of several Adani group companies and the nephew of the billionaire founder, shared price sensitive information and breached regulations aimed at preventing insider trading, according a document reviewed by Reuters. 

Adani, the nephew of Gautam Adani, was sent a notice by the Securities and Exchange Board of India (Sebi) last year which alleged he shared information about Adani Green's 2021 acquisition of SoftBank-backed SB Energy Holdings with his brother-in-law before the deal was announced, according to a source and the document. 

The matter has not been previously reported. In an e-mailed response sent to Reuters, Pranav Adani said he was seeking to settle the charges "to put an end to the matter, without admission or denial of the allegations" and that "he has not violated any securities law". 

Settlement terms were being discussed, said the source with direct knowledge of the matter, who declined to be named as the matter is confidential. The scrutiny is the latest challenge for the Adani group. 

US authorities last year indicted Gautam Adani and two Adani Green executives for allegedly paying bribes to secure Indian power supply contracts and misleading US investors. The group has denied the charges and called them "baseless". 

Pranav Adani "communicated UPSI (unpublished price sensitive information) pertaining to the SB Energy acquisition" to his brother-in-law Kunal Shah and violated norms related to insider trading rules in 2021, said the Sebi document, which showed call records and trading patterns were reviewed in the investigation. 

Kunal Shah and Nrupal Shah, his brother, then traded in shares of Adani Green and made "ill-gotten gains" of 9 million rupees ($108,000), the document added. 

The Shah brothers said in a statement sent by their law firm that the trades were not executed with the "knowledge of any unpublished price sensitive information nor with any mala fide intent." 

"The information in question was already generally available in the public domain," the statement said. Sebi did not respond to Reuters requests for comment. 

Adani Green's acquisition of SB energy on May 17, 2021 at an enterprise value of $3.5 billion is the largest acquisition in the renewable energy sector in India so far. 

Pranav Adani became aware of the impending acquisition two-three days prior to May 16, 2021, when the deal was finalised, Sebi said. 

Sebi had proposed that Kunal and Nrupal Shah also settle, but the brothers chose to contest the allegations as they found the terms too onerous, the source added. Pranav Adani's settlement plea would be taken up after Sebi's ongoing review of its settlement process is over.