Pranav Adani and three of his relatives have been served with show-cause notices by the Securities and Exchange Board of India (SEBI) in relation to the suspected insider trading in the Adani Group open offer in NDTV in 2022. The regulator claimed that Pranav Adani leaked unpublished price-sensitive information (UPSI) prior to the announcement of the deal to the community.
The regulator noted some of the communications between Pranav Adani and his brothers-in-law, Kunal Shah, Nrupal Shah, and father-in-law Dhanpal Shah over the period that was viewed as sensitive, as pointed out in the notice of SEBI. The period of the case is May 2-15 to September 15, 2022, the time leading to the announcement, the announcement, and the time thereafter.
The announcement of the open offer, which was announced after the trading hours on August 23, 2022, fell under the category of UPSI, recognized by SEBI. On the following day, when the market opened, NDTV stocks showed a significant increase as the stocks opened with a gain of 2.5% and closed almost 5% above the day before.
The open offer included the proposed takeover of up to 26% of the equity in NDTV shares by Vishvapradhan Commercial Private Limited, in collaboration with Adani Enterprises and AMG Media Networks. The companies were going to purchase $16.76 million shares at an offer value of Rs 294 per share, totaling around Rs 492.81 crore.
The investigation conducted by SEBI revealed that Kunal Shah was reported to have bought the NDTV shares on several occasions within the UPSI period. The trades were said to have been made during the days and weeks prior to the official announcement, which further called into doubt access to what was not public information.
In its notice, SEBI said that it launched the investigation to establish whether the persons in question traded under the possession of UPSI. The regulator focused on the nature of the trades and communications between parties and the time when they took place in the course of the investigation.
Only days before releasing this notice, SEBI had dropped another case of insider trading in respect of Pranav Adani and the same family. This is the previous case that is credited to the Adani Group acquiring SB Energy Holdings, and it was shuttered because of inadequate evidence.
Irrespective of such closure, SEBI still investigates the NDTV transaction. It is yet to take a definitive decision, but has directed the persons concerned to get back to the notices sent to them.