A special court in Mumbai has ordered the Anti-Corruption Bureau (ACB) to register a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and five other officials. The court's order stems from allegations of stock market fraud, regulatory violations, and collusion.
The court, after reviewing the evidence, found "prima facie evidence of regulatory lapses and collusion" requiring a thorough investigation. The order specifically mentions the alleged fraudulent listing of a company on the stock exchange, despite non-compliance with SEBI regulations.
The order follows a complaint filed by journalist Sapan Shrivastava, who alleged fraudulent listing of Cals Refineries Ltd. on the BSE in 1994, resulting in significant investor losses. Despite multiple attempts to bring these concerns to the attention of law enforcement and regulatory bodies, no action was taken, prompting the complainant to seek judicial intervention.
The court has directed the ACB to investigate the matter under relevant provisions of the Indian Penal Code (IPC), Prevention of Corruption Act, SEBI Act, and other applicable laws. The court will monitor the investigation and has requested a status report within 30 days.
However, SEBI has issued a press release disputing the allegations. SEBI stated that Madhabi Puri Buch and the current SEBI officials named in the complaint were not holding their respective positions at the time of the alleged offenses. SEBI also characterized the complainant as a "frivolous and habitual litigant" and stated that the court issued the order without providing SEBI an opportunity to present its perspective. SEBI has also announced that it will take appropriate legal steps to challenge the court order.
This development comes after a tumultuous period for Buch, who faced intense scrutiny during her tenure as SEBI chairperson. These controversies included conflict of interest allegations raised by Hindenburg Research and internal employee protests regarding the workplace environment at SEBI.