A special court in Mumbai has directed the Anti-Corruption Bureau (ACB) to file an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials for alleged stock market fraud and regulatory violations. The court order, issued on Saturday, stated that there is prima facie evidence of regulatory lapses and collusion, warranting a fair and impartial investigation.
The order also highlighted that the allegations reveal a cognisable offence, mandating a thorough probe. Due to the inaction of law enforcement agencies and SEBI, judicial intervention under the provisions of the Criminal Procedure Code was deemed necessary. Besides Buch, the other officials implicated in the FIR are BSE’s Managing Director and CEO Sundararaman Ramamurthy, former chairman and public interest director Pramod Agarwal, and three SEBI whole-time members.
The court specified that it will oversee the investigation and requested a status report within 30 days. The complainant, a media reporter, had raised concerns regarding the purported offences committed by the accused, involving financial fraud, regulatory breaches, and corruption. The allegations revolve around the fraudulent listing of a company on the stock exchange with the involvement of regulatory authorities, particularly SEBI, without adherence to prescribed norms.
The complainant alleged that SEBI officials neglected their statutory obligations, facilitated market manipulation, and enabled corporate fraud by permitting the listing of a company without meeting the required criteria. Despite multiple complaints to the police and regulatory bodies, no action was taken. After reviewing the evidence, the court directed the ACB to register an FIR under relevant laws such as the IPC, Prevention of Corruption Act, and SEBI Act.
Madhabi Puri Buch recently completed her term as SEBI chief amid controversies, including conflict of interest accusations by Hindenburg Research. Last year, Hindenburg had alleged that Buch and her husband had a conflict of interest that hindered a thorough investigation into manipulation and fraud claims at the Adani Group. The Buchs denied the allegations, stating that the investments were made before Madhabi Buch joined SEBI and were disclosed as required.
The court’s decision to order an FIR against Buch and others underscores the seriousness of the allegations and the need for a comprehensive investigation into the matter.
