CERC orders probe against GNA Energy over alleged insider trading in IEX matter

CERC orders probe against GNA Energy Over alleged insider trading in IEX matter

The Central Electricity Regulatory Commission (CERC) has launched a formal investigation into GNA Energy Private Limited (GNAEPL), a registered operator of an over-the-counter (OTC) power trading platform, following allegations of insider trading and market manipulation linked to CERC’s own market coupling order issued earlier this year.

In an order dated October 28, 2025, the power sector regulator took suo motu cognisance of a Securities and Exchange Board of India (SEBI) interim order issued on October 15, which found that certain individuals, including GNAEPL’s top executives and shareholders, had allegedly traded in the shares and derivatives of Indian Energy Exchange (IEX) based on unpublished price-sensitive information (UPSI) related to a pending CERC decision on market coupling.

What was SEBIs finding?

SEBI’s preliminary findings revealed that Sanjeev Kumar, Managing Director and CEO of GNAEPL, along with Narender Kumar, Bhoovan Singh, Virender Singh, and others, were privy to the contents of the CERC market coupling order dated July 23, 2025, before its public release. The regulator noted that confidential CERC documents and even images of draft orders were found on the devices of some of the individuals under investigation.

According to the SEBI, interim order authored by Whole Time Member (WTM) Kamlesh Chandra Varshney, several of the accused made significant profits by taking positions in IEX put options ahead of the CERC order announcement, which was expected to negatively impact the exchange’s trading volumes. SEBI subsequently impounded Rs 173.14 crore of alleged ill-gotten gains from eight entities and individuals.

Also read: Sebi cracks whip on insider traders in IEX shares; Rs 173 crore case unearthed

Funds Traced to GNA Energy

The SEBI order also indicated that part of the proceeds from these trades had been transferred to GNA Energy Pvt. Ltd., which operates under CERC’s regulatory framework. Fund flow analysis revealed that over Rs 4.29 crore had been credited to GNAEPL from connected entities, prompting concerns that a regulated market participant may have directly benefited from insider information.

The CERC order stated, “the shareholders/KMP of the Respondent, on the basis of prior knowledge and possession of unpublished price sensitive information relating to the market coupling order of this Commission dated 23.7.2025, appears to have indulged in insider trading, thereby, prima facie violating the relevant provisions of the SEBI Act, 1992 and the SEBI (Prohibition of Insider Trading) Regulations, 2015”.

CERC’s Regulatory Response

Referring to SEBI’s order dated 15.10.2025, CERC noted that shareholders and Managing Directors of GNA Energy Pvt. Ltd. appeared to have engaged in insider trading using confidential documents related to its 23.7.2025 order on market coupling. SEBI had named Sanjeev Kumar, CEO & CMD, and Narender Kumar the CTO of the company in its interim order. It found part of the alleged ill-gotten gains transferred to connected entities regulated by CERC.

CERC bench led by Chairperson Jishnu Barua wrote in its order that, “there exist sufficient reasons for this Commission to order an investigation/enquiry into the alleged involvement of the Respondent in the activities of market manipulation and insider trading, in accordance with the provisions of the Act.”

CERC cited Power Market Regulations, along with Section 128 of the Electricity Act, 2003, to justify a formal probe into GNAEPL’s conduct. After SEBIs order CERC has already sent three officials on compulsory leave and internal inquiry has been ordered.

Investigation panel appointed

The Commission has appointed a two-member investigating team. The two officials have been directed to submit a report within 21 days. Depending on the outcome of the probe, CERC may consider action including suspension or revocation of GNAEPL’s registration, or further penalties under the Electricity Act.

The case marks the first instance of an electricity market entity being drawn into a cross-regulatory insider trading investigation involving both CERC and SEBI. It also raises serious questions about information security and confidentiality at the intersection of the electricity and financial markets.

Meanwhile, SEBI is considering to sensitise all the sectoral regulators on handling of unpublished market moving information.

Also read: Sebi to sensitise regulators on insider trading and price-sensitive info post-CERC issue