Mumbai Court Orders FIR Against Ex-SEBI Chief Madhabi Buch And Others In Stock Market Fraud

The complaint accused the SEBI officials of facilitating market manipulation and allowing corporate fraud by letting a company go ahead with listing even when it failed to meet the prescribed norms.

Apart from Buch, multiple high-profile individuals are named in the complaint such as Whole Time Members Ashwani Bhatia, Kamlesh Chandra Varshney, and Ananth Narayan G, BSE Chairman Pramod Agarwal, and CEO Sundararaman. 

Source : PTI

A Mumbai court ordered a First Information Report (FIR) to be registered against some top officials of the Securities and Exchange Board of India (SEBI) including former SEBI Chairperson Madhabi Puri Buch. A special Anti-Corruption court ruled that a FIR should be registered against these entities in a case related to alleged stock market fraud and regulatory violations.

Special Judge S E Bangar issued the order on a petition filed by Sapan Shrivastava, a journalist based out of Thane, reported Financial Express. The complaint accused the SEBI officials of facilitating market manipulation and allowing corporate fraud by letting a company go through with the listing even when it failed to meet the prescribed norms.

The petitioner claimed that the capital markets regulator failed to exercise its statutory duty and this resulted in financial fraud, insider trading, and the embezzlement of public funds post the listing. The petition also named BSE in the allegations.

BSE Chairman And CEO Named In Petition

Apart from Buch, multiple high-profile individuals are named in the complaint such as Whole Time Members Ashwani Bhatia, Kamlesh Chandra Varshney, and Ananth Narayan G, BSE Chairman Pramod Agarwal, and CEO Sundararaman. 

Upon reviewing the complaint and supporting documents, Judge Bangar found prima facie evidence of regulatory lapses and collision, demanding a detailed investigation.

The court underlined that the allegations reveal a cognizable offence which requires a fair and impartial probe. As such, the court directed the Anti-Corruption Bureau (ACB) to register a FIR under the applicable provisions of the Indian Penal Code, the SEBI Act, and the Prevention of Corruption Act.

The Judge also instructed the ACB to run an investigation and submit a status report within 30 days. The court said that judicial intervention was important due to SEBI’s inaction and the possible impact of the matter on the investors’ confidence.