'Frivolous': Sebi reacts after court orders FIR against former chief Madhabi Puri Buch, 5 others

A special court in Mumbai has directed the Anti-Corruption Bureau (ACB) to register an FIR against former Sebi chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud and regulatory violations. The court order also noted that the allegations disclose a cognisable offence, necessitating an investigation. "There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe," the special ACB court judge, Shashikant Eknathrao Bangar, said in the order passed on Saturday. The inaction by law enforcement (agencies) and the SEBI necessitates judicial intervention under the provisions of the CrPC (Criminal Procedure Code), it added.

SEBI's reaction on the court order

The market regulator said that it would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters. It added that a miscellaneous application was filed before the ACB court against Buch, three current whole time members of SEBI and two officials of the BSE. Sebi further added that the applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the court, with imposition of costs in some cases.

"The application sought directions for the Police to register an FIR and investigate into the alleged irregularities in granting listing permission to a Company on the Bombay Stock Exchange in 1994, withoutcomplying with the provisions of the SEBI Act, 1992, SEBI (ICDR) Regulations, 2018, and the SEBI (LODR) Regulations, 2015," Sebi said in a statement.

Who is the complainant?

The complainant, Sapan Shrivastava (47), is a media reporter, who had sought an investigation into the alleged offences committed by the proposed accused, involving large-scale financial fraud, regulatory violations and corruption.

The allegations pertain to the fraudulent listing of a company on the stock exchange with the active connivance of regulatory authorities, particularly the Sebi, without compliance under the SEBI Act, 1992 and rules and regulations thereunder. The complainant claimed that the 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.

Apart from Buch, the other officials against whom the court has ordered registration of the FIR are BSE's Managing Director and Chief Executive Officer Sundararaman Ramamurthy, its then chairman and public interest director Pramod Agarwal and Sebi's three whole time members Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney. The court said it will monitor the probe, and sought a status report (of the case) within 30 days.

(With inputs from PTI)