Mumbai court orders FIR against ex-SEBI chief Madhabi Puri Buch, 5 others in alleged stock fraud case  

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.  

Business Today was unable to review the order independently.

The complaint alleges large-scale financial fraud, regulatory violations and corruption. It alleged that a company was fraudulently listed on the stock exchange with the active involvement of regulatory authorities, particularly SEBI, bypassing compliance requirements under the SEBI Act, 1992. The complaint further alleges that SEBI officials failed in their duty, facilitated market manipulation, and enabled corporate fraud.  

Despite repeated complaints to police and regulatory bodies, no action was taken, the complainant claimed. After reviewing the case, the court directed ACB Worli, Mumbai Region, to register an FIR under relevant provisions of the IPC, Prevention of Corruption Act, SEBI Act, and other applicable laws.    

 

SEBI and BSE respond

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.  

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.

(With inputs from PTI)