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The Securities and Exchange Board of India (SEBI) has announced that it will challenge a special court’s directive to file a First Information Report (FIR) against its former chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud and regulatory lapses. The market regulator contends that the court acted on a “frivolous” petition and did not provide SEBI an opportunity to present its case.
A special court, presided over by Judge Shashikant Eknathrao Bangar, ruled that a case should be registered against Buch and others, citing “prima facie evidence of regulatory lapses and collusion” that warranted a fair and impartial investigation. The court also stated that it would monitor the probe and requested a status report within 30 days.
The petition leading to this order was filed by journalist Sapan Shrivastava, who sought an investigation into the alleged violations. The court observed that the allegations disclosed a cognizable offense, making an investigation necessary, and noted that the inaction by law enforcement agencies and SEBI justified judicial intervention.
In response, SEBI asserted its intent to take “appropriate legal steps to challenge this order” and criticized the proceedings. The regulator pointed out that the officials named were not holding their respective positions at the time in question and claimed that the court issued its order without giving SEBI an opportunity to present the facts.
“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 stated.
Madhabi Puri Buch, the first woman to head SEBI, completed her three-year tenure on March 1. During her leadership, she played a key role in expediting equity settlements, enhancing foreign portfolio investor (FPI) disclosures, and promoting mutual fund penetration through Rs 250 Systematic Investment Plans (SIPs). However, the final year of her tenure was marked by controversy.
Apart from Buch, the FIR order includes names such as BSE Managing Director and Chief Executive Officer Sundararaman Ramamurthy, former BSE chairman and public interest director Pramod Agarwal, as well as SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney.
The case is expected to develop further as SEBI moves to challenge the court’s decision.
Sources By Agencies
