Former Chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, along with other implicated officials, has moved the Bombay High Court seeking to quash a first information report (FIR) ordered against them in connection with a listing fraud case. The FIR was directed by a Mumbai court last Saturday following allegations of financial fraud and violations of regulatory standards during the listing of a company on the Bombay Stock Exchange (BSE) back in 1994.
The plea was mentioned before Justice SG Dige and is set to be heard tomorrow. Representing the SEBI officials, Solicitor General Tushar Mehta took a prominent role in court proceedings, while Senior Advocate Amit Desai appeared on behalf of two BSE officials also implicated in the case.
Special Judge Shashikant Eknathrao Bangar had ordered the FIR against Buch and three current whole-time directors of SEBI—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—along with BSE officials Pramod Agarwal and Sundararaman Ramamurthy. This action followed an application by Dombivali-based reporter Sapan Shrivastava, pressing for a thorough investigation into the alleged irregularities surrounding the 1994 listing facilitated by top officials.
The allegations suggest serious malpractices including market manipulation, insider trading, and the artificial inflation of share prices, leading to significant investor losses and breaches of the SEBI Act, 1992, among other regulations. The complaint also highlights a persistent lack of action by both the police and SEBI despite multiple previous complaints, underlining the need for judicial oversight.
The court emphasized that the allegations prima facie constitute a cognizable offence, warranting further investigation given the evident inaction by both law enforcement agencies and the regulatory body. “The inaction by law enforcement and SEBI necessitates judicial intervention under Section 156(3) CrPC,” remarked Judge Bangar.
A status report on the ongoing investigation is expected to be submitted to the court within the next 30 days.
