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The Bombay High Court on Monday directed the Anti-Corruption Bureau (ACB) to hold off on taking any action until March 4 regarding the FIR registered against former SEBI chairperson Madhabi Puri Buch and five other officials.
Court Puts FIR on Hold
Buch, along with BSE Managing Director Sundararaman Ramamurthy and four other officials, had approached the Bombay High Court challenging the special court’s order that directed the ACB to register a case against them for alleged stock market fraud and regulatory violations.
Justice S.G. Dige, presiding over the petition, stated that the court will hear the case on Tuesday. Until then, no action will be taken based on the special court’s order.
Solicitor General Tushar Mehta Represents SEBI Officials
Appearing for Buch and three SEBI full-time directors – Ashwani Bhatia, Anant Narayan G, and Kamlesh Chandra Varshney, Solicitor General Tushar Mehta argued in court. Meanwhile, senior advocate Amit Desai represented BSE Managing Director Sundararaman Ramamurthy and former BSE Chairman Pramod Agarwal.
The petitioners challenged the special court’s order, calling it illegal and arbitrary. They argued that the order was issued without giving them a chance to present their side and is therefore legally unsustainable. Their petition stated:
"The special court’s order is erroneous, illegal, and issued without jurisdiction. The complainant has not established a prima facie case against SEBI officials for failing to perform their duties."
SEBI Plans to Take Legal Action
In response to the developments, SEBI released a statement on Sunday, saying that it will take appropriate legal steps to challenge the special court’s order. The market regulator reaffirmed its commitment to ensuring proper regulatory compliance in all cases.
The complaint was filed by media reporter Sapan Srivastava, who alleged large-scale financial fraud, regulatory violations, and corruption. He claimed that SEBI officials failed in their duties, allowed corporate fraud, and manipulated the stock market by approving the listing of a company that did not meet the required criteria.
On Saturday, ACB court judge Shashikant Eknathrao Bangar stated that there is prima facie evidence of regulatory lapses and collusion, warranting an impartial investigation.
Court Orders Status Report Within 30 Days
The special court ruled that the allegations amount to a cognizable offense, which necessitates an investigation. It further stated that it will monitor the progress of the case and directed officials to submit a status report within 30 days.
Buch’s Resignation Amid Allegations
Madhabi Puri Buch, who was the first woman to lead SEBI, has also faced allegations of conflict of interest from Hindenburg Research, a US-based investment and research firm. Her three-year term as SEBI chairperson ended on February 28, following which she resigned from her post.
