Mumbai: A special Anti-Corruption court in Mumbai has ordered the registration of an FIR against senior officials from the Securities and Exchange Board of India (SEBI), including former SEBI chairperson Madhabi Puri Buch, and officials from the Bombay Stock Exchange (BSE) in connection with an alleged stock market fraud and regulatory violations.
The order came after a petition filed by Thane-based journalist Sapan Shrivastava, who accused the officials of large scale financial fraud and corruption related to the listing of company on the Stock Market Exchange.
The complainant alleged that SEBI officials failed to fulfill their duties, facilitated market manipulation, and allowed the listing of a company that did not meet the necessary regulatory norms. The complainant also claimed that SEBI officials failed in their statutory duty, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet the prescribed norms.
The complaint names several high-profile individuals, including former SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Additionally, BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy were also listed as respondents. However, none of the accused were present during the court proceedings.
The Court, after reviewing the complaint and supporting documents, found prima facie evidence of regulatory lapses and collusion, warranting a detailed investigation. The court emphasised that the allegations disclose a cognizable offence, requiring a fair and impartial probe. The Court instructed the Anti-Corruption Bureu (ACB) in Mumbai to register an FIR under the relevant sections of the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act.
The Court noted that the allegations pointed to a cognizable offence and called for a fair investigation. It directed the ACB to submit a status report within 30 days. The court stated that judicial intervention was necessary due to SEBI’s inaction and the potential impact on investor confidence.
India’s first woman SEBI chief Madhabi Puri Buch completed her three-year term last Friday. During her tenure, many allegations were leveled against her. American short-seller Hindenburg had implicated Buch along with Adani Group in one of its reports. She had to face allegations of conflict of interest.
Last year, Hindenburg Research accused Madhabi Puri Buch – the chief of market regulator Securities and Exchange Board of India (Sebi) – of having links with offshore funds used by Adani group. However, both Ms Buch and the Adanis denied any wrongdoing.