India’s energy regulator has opened an internal investigation after the Securities and Exchange Board of India (SEBI) accused several officials of insider trading related to power market reforms. The Central Electricity Regulatory Commission (CERC) confirmed Thursday that it has suspended three employees and set up a fact-finding committee following SEBI’s interim order earlier this week, according to Indian media.
The case centers on trading in shares of the Indian Energy Exchange (IEX), India’s dominant platform for spot electricity, renewable certificates, and short-term power contracts. SEBI alleges that the officials used confidential information about a pending “market coupling” policy change to buy and sell IEX equity and derivatives before the decision was made public. The reform aims to merge bidding across all exchanges into a single pool to boost efficiency, but could weaken IEX’s market share.
In a separate regulatory filing, SEBI demanded the return of about 1.73 billion rupees (roughly $20 million) in “ill-gotten gains” and barred 13 individuals from trading pending completion of its probe.
The inquiry comes amid growing tension between India’s drive for deeper power-market liberalization and the governance standards required to manage that. The market-coupling proposal is seen as a major step toward creating a unified national electricity market. However, the scandal threatens to undermine investor confidence in regulatory impartiality at a time when renewable developers and utilities are becoming more dependent on transparent short-term pricing.
India’s power exchanges handled more than 100 billion kWh of transactions last year, with IEX accounting for over 85% of total volume, making the outcome of the investigation critical for the credibility of future reforms.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
