Mumbai court orders FIR lodging vs former SEBI chief Madhabi Puri Buch

A special court in Mumbai on Saturday ordered the filing of a first information report (FIR) against former SEBI chairperson Madhabi Puri Buch, several officials of the regulator, and against stock exchange BSE. Special Judge SE Bangar issued the order after a journalist filed a petition to report alleged major financial fraud and corruption in a company’s listing on the bourse. The said SEBI officials cleared a company that did not fulful regulatory requirements to list its shares, as per the petition. They facilitated the listing for the company, engaging in market manipulation and causing losses to invetors, it noted.

The complainant alleged collusion between SEBI and corporate entities that led to serious financial crime.

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Besides Buch, SEBI Whole-time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy were named in the complaint.

However, none of them was represented in the court proceeding.

Justice Bangar reviewed the complaint and its supporting documents, and found prima facie evidence of wrongdoing.

The judge then directed the Anti-Corruption Bureau (ACB) in Mumbai to register an FIR under relevant provisions under law.

"The allegations disclose a cognizable offense, necessitating a fair and impartial probe… There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” said the judge.

The inaction by law enforcement and SEBI necessitates judicial intervention, he said.

"Considering the gravity of allegations, applicable laws, and settled legal precedents, this Court deems it appropriate to direct an investigation," Justice Bangar said, ordering the bureau to submit a status report within 30 days.