A special Anti-Corruption court in Mumbai has directed the registration of a First Information Report (FIR) against senior officials of the Securities and Exchange Board of India (SEBI), including former SEBI Chairperson Madhabi Puri Buch, in connection with alleged stock market fraud and regulatory violations. The order was issued by Special Judge SE Bangar following a petition filed by Thane-based journalist Sapan Shrivastava.
Allegations of Market Manipulation
The complaint accuses SEBI officials of enabling corporate fraud and market manipulation by permitting the listing of a company that did not meet the required norms. According to the petitioner, SEBI’s failure to fulfill its regulatory duties resulted in financial fraud, insider trading, and the siphoning of public funds post-listing. The Bombay Stock Exchange (BSE) has also been implicated in the case.
Several high-profile figures have been named in the complaint, including former SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy are also among the respondents. Notably, none of the accused were represented during the court proceedings.
Judicial Observations
After reviewing the complaint and supporting documents, Judge Bangar determined that there was prima facie evidence suggesting regulatory lapses and collusion, warranting a thorough investigation. The court emphasized that the allegations constituted a cognizable offense requiring a fair and impartial probe.
Consequently, the Anti-Corruption Bureau (ACB), Mumbai, has been instructed to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act. Acknowledging the seriousness of the allegations, the court has mandated the ACB to conduct an investigation and submit a status report within 30 days.
The court also noted that judicial intervention was necessary due to SEBI’s inaction and the potential implications for investor confidence.