Former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and three whole-time directors have approached the Bombay High Court to quash an order passed by a Mumbai court directing a case against them in a listing fraud case. This comes after SEBI issued a statement stating that it would take legal action against the said ruling. It also dismissed the complaint as coming from a “frivolous and habitual litigant”.
According to a report in Bar and Bench the matter was mentioned before Judge SC Dige and is expected to be heard tomorrow. Solicitor General Tushar Mehta appeared for the SEBI officials.
The Bombay High Court had directed the Anti-Corruption Bureau (ACB) to register a case against them. The case pertained to allegations of financial fraud and regulatory violations concerning the listing of a company on the Bombay Stock Exchange in 1994. Senior Advocate Amit Desai represented the BSE officials.
Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney are the three whole-time SEBI directors and Pramod Agarwal and Sundararaman Ramamurthy are the two BSE officials.
The report stated that a status report on the investigation is expected to be submitted within the next 30 days.
One Sapan Shrivastava, a reporter from Dombivali, filed an application seeking an investigation into the alleged irregularities in the listing of the company. He said that the listing took place against the norms of the SEBI Act, 1992, and that Buch and the directors failed to exercise their regulatory duties. The accused were also engaged in market manipulation, insider trading and artificial inflation of share prices, which defrauded investors and violated the Prevention of Corruption Act, the complainant stated.
“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 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," stated SEBI in its response before moving the court.