Special Court Directs ACB to File FIR Against Former SEBI Chief Madhabi Puri Buch and Others Over Alleged Financial Fraud

 

Keywords:SEBI, Madhabi Puri Buch, Anti-Corruption Bureau, Financial Fraud, IPO Manipulation, Insider Trading, Stock Market, SEBI Act, Prevention of Corruption Act

A Special Anti-Corruption Bureau (ACB) Court has directed the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other senior officials over allegations of financial fraud, regulatory violations, and corruption. The order was issued just a day after Buch completed her tenure as SEBI chairperson.

Background of the Case

✔ Complainant: Journalist Sapan Shrivastava (Thane-based)
✔ Allegation: Fraudulent IPO listing on Bombay Stock Exchange (BSE) in 1994, violating SEBI Act, 1992
✔ Accused Officials:

• Madhabi Puri Buch (Former SEBI Chairperson)
• Ashwani Bhatia (SEBI Whole-time Member)
• Ananth Narayan G (SEBI Whole-time Member)
• Kamlesh Chandra Varshney (SEBI Whole-time Member)
• Pramod Agarwal (BSE Chairperson)
• Sundararaman Ramamurthy (BSE CEO)

Allegations and Findings

🔹 SEBI allegedly permitted an IPO listing despite regulatory non-compliance
🔹 Fraudulent listing led to market manipulation and corporate fraud
🔹 Evidence of insider trading, round-tripping, and artificial stock price inflation
🔹 Promoters allegedly siphoned off public funds post-listing
🔹 SEBI failed to take action despite multiple red flags

Court’s Observations and Directions

✔ Judge: Shashikant Eknathrao Bangar (Special ACB Court)
✔ Legal Basis: Indian Penal Code, Prevention of Corruption Act, SEBI Act, and other applicable laws
✔ Key Ruling:

• The allegations constitute a cognisable offence, necessitating an investigation
• SEBI officials and BSE executives failed in their statutory duty
• Law enforcement ignored complaints, warranting judicial intervention
  ✔ Next Steps:
• ACB must register an FIR and initiate a probe
• Status report to be submitted within 30 days
• Investigation monitored by the court

Conclusion

This case marks a significant legal and regulatory development, bringing market fraud allegations against SEBI’s highest office bearers under scrutiny. With the ACB’s investigation now underway, the outcome could have far-reaching implications for India’s financial regulatory landscape.

 Tags:#SEBI #FinancialFraud #StockMarket #InsiderTrading #CorporateCorruption #ACB #RegulatoryViolations #BSE

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