A special Anti-Corruption Bureau (ACB) court in Mumbai has directed the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations.
The Securities and Exchange Board of India (SEBI) is preparing to challenge order of the ACB Court. 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.
Earlier in an order issued on Saturday, Special Judge Shashikant Eknathrao Bangar stated that there was prima facie evidence of regulatory lapses and collusion, warranting a fair and impartial probe. The court has decided to monitor the investigation and has asked for a status report within 30 days.
The complaint, filed by a media reporter, alleges large-scale financial fraud, regulatory violations, and corruption in connection with the fraudulent listing of a company on the stock exchange. It claims that SEBI officials failed in their statutory duties, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet the prescribed norms.
Despite multiple appeals to law enforcement agencies and regulatory bodies, no action was taken, the complainant stated.
The court noted that the allegations indicate a cognizable offence that requires investigation and emphasized that the inaction of SEBI and other law enforcement agencies necessitated judicial intervention.
After reviewing the material on record, the court directed the ACB Worli, Mumbai Region, to register an FIR under relevant sections of the Indian Penal Code (IPC), Prevention of Corruption Act, SEBI Act, and other applicable laws.
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