The Securities and Exchange Board of India (SEBI) is preparing to challenge an order by the ACB Court in Mumbai, which directed the filing of an FIR against former chairperson Madhabi Puri Buch, three current whole-time members, and two officials of BSE.
In a statement released on March 2, SEBI dismissed the complaint as coming from a “frivolous and habitual litigant” and asserted that it would take legal action to contest the ruling.
“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 any opportunity to SEBI to place the facts on record,” the regulator stated.
"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. SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters," it added.
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 over alleged stock market fraud and regulatory violations.
"There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe," special ACB court judge Shashikant Eknathrao Bangar said in his order on March 1.
The court has decided to monitor the investigation and has sought a status report within 30 days. It noted that the allegations reveal a cognisable offence, necessitating a formal probe. The order also criticized the inaction of law enforcement agencies and the Securities and Exchange Board of India (SEBI), stating that judicial intervention was required under the Criminal Procedure Code (CrPC),as per a PTI report.
The complaint alleges large-scale financial fraud, regulatory violations, and corruption. It claims that a company was fraudulently listed on the stock exchange with regulatory collusion, bypassing compliance norms under the SEBI Act, 1992. Additionally, it accuses SEBI officials of enabling market manipulation and corporate fraud.
BSE also responds
BSE in a statement said the named company, Cals Refineries Ltd., was listed in 1994. 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 application is frivolous and vexatious in nature.
"The Honourable Court has allowed the application without issuing any notice or granting any opportunity to BSE to place the facts on record. BSE is initiating necessary and appropriate legal steps in this regard. As a responsible market institution, BSE remains committed to upholding regulatory compliance and ensuring transparency," the statement added.