Description

SEBI issues ex-parte interim order against 8 entities for alleged insider trading in Indian Energy Exchange Limited (IEX) scrip following CERC announcement on July 23, 2025.

Summary

SEBI has issued an ex-parte interim order under Sections 11(1), 11(4) and 11B(1) of the SEBI Act, 1992 against 8 entities for alleged insider trading in the scrip of Indian Energy Exchange Limited (IEX). The order was issued following a suo-motu preliminary examination that was initiated after significant price fall in IEX shares subsequent to a Central Electricity Regulatory Commission (CERC) announcement on July 23, 2025 after-market hours. An Investigating Authority was appointed on September 12, 2025 to investigate trading activities during the period July 01, 2025 to August 14, 2025. Search and seizure operations were conducted at different locations pursuant to an order from the Hon’ble Special Court.

Key Points

  • 8 entities identified as noticees: Bhoovan Singh, Amar Jit Singh Soran, Amita Soran, Anita, Narender Kumar, Virender Singh, Bindu Sharma, and Sanjeev Kumar
  • Investigation covers the period from July 01, 2025 to August 14, 2025
  • Trading suspected to be based on unpublished price sensitive information (UPSI) related to CERC announcement
  • Investigating Authority appointed on September 12, 2025
  • Search and seizure operations conducted at multiple locations
  • Order examines origin of UPSI, connections amongst noticees, communication of UPSI, trading patterns, profits made, and fund flow analysis
  • SEBI received complaint alleging insider trading during preliminary examination

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and the SEBI Act, 1992.

Compliance Requirements

  • Noticees are subject to interim restrictions as specified in the order (specific restrictions not detailed in the partial document provided)
  • Entities must comply with SEBI’s PIT Regulations regarding trading on basis of UPSI
  • Market participants must maintain proper communication and trading records for regulatory scrutiny
  • Insiders must adhere to disclosure requirements and trading window restrictions

Important Dates

  • July 01, 2025: Start of investigation period
  • July 23, 2025: CERC announcement made after-market hours that triggered price fall
  • August 14, 2025: End of investigation period
  • September 12, 2025: Investigating Authority appointed by SEBI
  • October 16, 2025: Ex-parte interim order issued

Impact Assessment

Market Impact: High - Insider trading allegations in a listed exchange company (IEX) involving multiple entities signals serious market integrity concerns. The significant price fall following the CERC announcement indicates material impact on investor wealth.

Regulatory Impact: High - Demonstrates SEBI’s proactive enforcement approach with suo-motu examination, use of search and seizure powers, and swift interim action. Sets precedent for regulatory intervention in suspected insider trading cases.

Operational Impact: High - The 8 noticees face trading restrictions and potential further penalties. The order examines profit calculations and fund flows, indicating potential disgorgement and penalties. Other market participants should enhance insider trading controls and UPSI management protocols.

Investor Confidence: The swift regulatory action demonstrates market surveillance effectiveness but also highlights risks of insider trading in sensitive regulatory announcements affecting listed companies.

Impact Justification

High-severity enforcement action involving insider trading allegations with ex-parte interim order against 8 entities, indicating serious regulatory violations and potential market manipulation.