SEBI To Challenge Court Order Directing FIR Against Madhabi Buch, 5 Others. BSE Calls Allegations ‘Frivolous’
SEBI is set to challenge a court order for FIR against ex-chairperson Madhabi Puri Buch over alleged stock market fraud. The BSE also dismissed the allegations, calling the application “frivolous.”
The Securities and Exchange Board of India (SEBI) has announced that it will take “appropriate legal steps” to challenge an Anti-Corruption Bureau (ACB) court order directing the registration of a First Information Report (FIR) against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations.
A special ACB court in Mumbai, presided over by Judge Shashikant Eknathrao Bangar, issued the directive on Saturday, stating that there is prima facie evidence of regulatory lapses and collusion that warrant a fair and impartial probe, news agency PTI reported. The court also said it would monitor the investigation and has sought a status report within 30 days.
The FIR has been ordered against Buch, BSE’s Managing Director and Chief Executive Officer Sundararaman Ramamurthy, former BSE chairman and public interest director Pramod Agarwal, and SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney.
SEBI, in an official statement, said that the application seeking police action was allowed even though the accused officials were not in their respective positions at the time of the alleged violations. The market regulator asserted that the application was filed without SEBI being given an opportunity to present its case.
"A Miscellaneous Application was filed before the ACB Court, Mumbai, against the former Chairperson of SEBI, three current Whole Time Members of SEBI, and two officials of the BSE. The application sought directions for the police to register an FIR and investigate the alleged irregularities in granting listing permission to a company on the Bombay Stock Exchange in 1994," SEBI stated.
"Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting SEBI an opportunity to place the facts on record," the regulator added. SEBI further claimed that the applicant, Sapan Shrivastava, a 47-year-old media reporter, is a habitual litigant, whose previous applications had been dismissed with costs in some instances.
BSE Calls Allegations ‘Frivolous’
The Bombay Stock Exchange (BSE) also dismissed the allegations, calling the application “frivolous and vexatious.” The stock exchange stated that it would take “necessary and appropriate legal steps” in response to the court order.
“The officials named in the application were not in their respective positions at the time of listing and were not connected with the company at all,” the BSE said in a statement, adding that it remains committed to regulatory compliance and transparency.
ALSO READ | Mumbai Court Orders FIR Against Ex-SEBI Chief Madhabi Buch And Others In Stock Market Fraud
Complainant Alleges Large-Scale Market Manipulation
The complaint, filed by Shrivastava, alleged that SEBI officials failed in their statutory duty by allowing the fraudulent listing of a company on the stock exchange in 1994, which facilitated market manipulation and corporate fraud. He claimed that despite repeated complaints to the police and regulatory bodies, no action was taken.
According to the court order, the complainant submitted documentary evidence, including regulatory filings, stock market reports, whistleblower correspondence, and financial reports, to demonstrate procedural lapses, share price manipulation, and investor deception. The allegations include insider trading, price manipulation, and round-tripping, misleading investors about the company’s financial health, PTI reported.
The ACB Court observed that SEBI and law enforcement agencies had failed to act on the allegations, necessitating judicial intervention under the Criminal Procedure Code (CrPC). The FIR is to be registered under the relevant provisions of the Indian Penal Code (IPC), Prevention of Corruption Act, SEBI Act, and other applicable laws.
Madhabi Puri Buch, India’s first woman SEBI chief, completed her three-year tenure on Friday.
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