Former SEBI chief Madhabi Puri Buch moves HC against special court's FIR order against her

In its ruling, the special court directed the ACB to file an FIR against Buch and others for alleged fraud and regulatory violations related to the fraudulent listing of a company on the stock exchange in 1994

Former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch, along with Bombay Stock Exchange (BSE) Managing Director Sundararaman Ramamurthy and four other officials, have approached the Bombay High Court (HC) to quash a special court’s recent order that directed the registration of an FIR against them for alleged stock market fraud and regulatory violations, PTI reported.

The petitions were presented before Justice SG Dige of HC on Monday for urgent hearing. The bench decided to hear the pleas on Tuesday, issuing an interim order instructing that the state Anti-Corruption Bureau (ACB), which was directed by the special court to investigate the case, should not take any action based on the court's order until the next hearing.

The legal team representing the petitioners includes Solicitor General Tushar Mehta, who is appearing for Madhabi Puri Buch and three current whole-time Sebi directors — Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Senior Counsel Amit Desai is representing Sundararaman Ramamurthy, the BSE’s Managing Director and CEO, as well as former BSE Chairman and public interest director Pramod Agarwal, PTI reported.

According to PTI, the petitioners have argued that the special court's order, issued on March 1, is both illegal and arbitrary. In its ruling, the special court directed the ACB to file an FIR against the accused for alleged fraud and regulatory violations related to the fraudulent listing of a company on the stock exchange in 1994. The court found prima facie evidence of regulatory lapses and collusion, calling for an impartial investigation into the matter.

The court also instructed the ACB to monitor the probe and submit a status report within 30 days. This order followed a complaint filed by media reporter Sapan Shrivastava, who accused the officials of involvement in large-scale financial fraud, regulatory violations, and corruption.

The allegations primarily revolve around the fraudulent listing of a company on the Bombay Stock Exchange in 1994, allegedly with the assistance of regulatory authorities, particularly Sebi, and without compliance with the SEBI Act of 1992. The Sebi, in response, stated it would challenge the special court's order through appropriate legal steps, reiterating its commitment to ensuring due regulatory compliance, PTI reported.

The Sebi also pointed out that the application which led to the court’s order sought to investigate alleged irregularities in granting listing permission to a company, despite the fact that the accused officials were not in their respective positions at the time of the alleged events.

The Bombay Stock Exchange, in a statement, dismissed the application as "frivolous and vexatious in nature," continuing to dispute the claims brought against its senior management and the regulatory body, PTI cited.

As the legal proceedings unfold, all eyes are on the Bombay High Court's next hearing, which could significantly impact the direction of the investigation and the future of the involved parties.

(With inputs from PTI)

"Exciting news! Mid-day is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!