The Bombay High Court on Tuesday continued its interim stay on the execution of a special court’s directive to file an FIR against former SEBI Chairperson Madhabi Puri Buch and five other officials. These officials were implicated in allegations involving stock market fraud and breaches of regulatory norms. The stay, initially imposed last month, was extended following a review that deemed the special court’s order as lacking specificity and mechanically issued.
Justice Shivkumar Dige presided over the hearing and has scheduled the next session for May 7, allowing time for Buch and the other respondents to examine new submissions made by the original complainant. “The interim relief granted earlier shall continue until further orders,” stated Justice Dige during the proceedings.
The controversy stems from a special court’s response to a complaint by media reporter Sapan Shrivastava, which led to a March 1 order by Special ACB court judge S.E. Bangar. The order cited prima facie evidence of regulatory failures and suspected collusion that merited a thorough and unbiased investigation, directing the Anti-Corruption Bureau (ACB) to register an FIR against the individuals involved.
The implicated parties include three current whole-time directors of SEBI—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—as well as Sundararaman Ramamurthy, the Managing Director and CEO of the Bombay Stock Exchange (BSE), and BSE’s former chairman Pramod Agarwal. These individuals have contested the special court’s order, labeling it as “manifestly erroneous, patently illegal and passed without jurisdiction.”
The allegations focus on purportedly fraudulent activities dating back to 1994, involving the listing of a company on the BSE, purportedly facilitated by regulatory oversights by SEBI. Despite the dated nature of these claims, the special court felt compelled to initiate a formal inquiry, also mandating oversight of the investigation with periodic updates.
In defense, SEBI argued that the implicated officials were not in their respective positions at the time of the alleged infractions and were not provided an opportunity to present facts before the court proceeded with its directive. Similarly, the BSE described the accusations as “frivolous and vexatious,” underscoring that the officials named had no connection to the events in question at the time they occurred.
