A special Anti-Corruption court in Mumbai has ordered the registration of a First Information Report (FIR) against top officials of the Securities and Exchange Board of India (SEBI), including former SEBI Chairperson Madhabi Puri Buch, in a case related to alleged stock market fraud and regulatory violations. The order was issued by Special Judge SE Bangar on a petition filed by Thane-based journalist Sapan Shrivastava.
Market manipulation allegation
The complaint accuses SEBI officials of facilitating market manipulation and enabling corporate fraud by allowing the listing of a company that did not meet the prescribed norms. The petitioner claims that SEBI’s failure to exercise its statutory duty led to financial fraud, insider trading, and the siphoning of public funds after the listing. Additionally, the Bombay Stock Exchange (BSE) was also implicated in the allegations.
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The complaint names several high-profile individuals, including former SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Additionally, BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy were also listed as respondents. Notably, none of the accused were represented in the court proceedings.
Judicial findings
After reviewing the complaint and supporting documents, Judge Bangar found prima facie evidence of regulatory lapses and collusion, warranting a detailed investigation. The court emphasised that the allegations disclose a cognizable offence, requiring a fair and impartial probe. Consequently, the Anti-Corruption Bureau (ACB), Mumbai, has been directed to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act.
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Recognising the gravity of the allegations, Judge Bangar mandated the ACB to conduct an investigation and submit a status report within 30 days. The court stated that judicial intervention was necessary due to SEBI’s inaction and the potential impact on investor confidence.
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