A special court in Mumbai has ordered that a case be filed against former SEBI chairperson Madhabi Puri Buch and five other officials linked to alleged stock market fraud and regulatory violations. The court will oversee the investigation and request a status report within 30 days. SEBI plans to contest the ruling, claiming the case is based on a frivolous petition without allowing them to present their side. Judge Shashikant Bangar highlighted evidence of regulatory lapses and collusion, necessitating judicial intervention. Buch, who ended her tenure on March 1, achieved notable advancements during her time but faced controversy.
Mumbai:
A special court has mandated the filing of a case against former SEBI (Securities and Exchange Board of India) chairperson Madhabi Puri Buch along with five other officials concerning alleged stock market fraud and regulatory breaches. The court has indicated it will oversee the investigation and has requested a status report on the case within 30 days. SEBI stated it would challenge the order, asserting that the court was responding to a “frivolous” petition and had not allowed the board an opportunity to present its perspective.
“There is prima facie evidence of regulatory failures and collusion, necessitating a fair and impartial investigation,” remarked special court judge Shashikant Eknathrao Bangar in relation to the petition filed by journalist Sapan Shrivastava, who requested the inquiry.
The allegations reveal a cognizable offence, making an investigation essential, and the inaction from law enforcement agencies and SEBI “requires judicial intervention,” the judges noted.
SEBI announced it would be “taking appropriate legal actions to contest this order”.
SEBI asserted that the officials named were not in their respective roles at the time of the events in question, stating, “The court approved the application without issuing any notice or allowing any opportunity for SEBI to present the facts.”
SEBI further stated, “The applicant is recognized as a frivolous and habitual litigant, with prior applications dismissed by the Court, including some with imposed costs.”
The three-year term of Ms. Buch—the first female leader of the markets regulator—concluded on March 1. Throughout her term, Ms. Buch achieved notable progress in areas such as expedited settlements in equities, improved FPI disclosures, and expanding mutual fund access through Rs 250 SIP. However, the final year of her tenure was marked by controversy.
In addition to her, the officials against whom the court has ordered the registration of First Information Reports include BSE Managing Director and Chief Executive Officer Sundararaman Ramamurthy, its then-chairman and public interest director Pramod Agarwal, and SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney.
(With agencies)