A Special Court in Mumbai has directed the Anti-Corruption Bureau (ACB), Mumbai, to register an FIR against former Securities and Exchange Board of India (SEBI) Chairperson, Madhabi Puri Buch, along with three Whole-Time Members of SEBI and senior officials of the Bombay Stock Exchange (BSE).
The order was passed by Special Judge (Prevention of Corruption Act), S.E. Bangar, while hearing an application filed under Section 156(3) of the Criminal Procedure Code (CrPC). The application was moved by Sapan Shrivastava, a journalist, who alleged fraudulent practices and regulatory lapses by SEBI and BSE officials.
Upon reviewing the complaint, the court noted that it disclosed a cognizable offence and, accordingly, directed the ACB to register an FIR under relevant provisions of the Indian Penal Code (IPC), the Prevention of Corruption (PC) Act, and the SEBI Act. The agency has been instructed to submit a probe report within 30 days.
The individuals named in the order include:
• Madhabi Puri Buch – Former Chairperson, SEBI
• Ashwani Bhatia, Anant Narayan G, Kamlesh Varshney – Whole-Time Members, SEBI
• Sundararaman Ramamurthy – Director, BSE
• Pramod Agarwal – Public Interest Director, BSE
Allegations in the Complaint
Shrivastava alleged that SEBI and BSE officials colluded to allow the fraudulent listing of a company on the stock exchange and subsequently failed to take action against its malpractices. He claimed that he and his family invested in shares of Cals Refineries Ltd on December 13, 1994, and suffered substantial financial losses. The complaint further alleged that SEBI and BSE officials ignored corporate fraud, failed to protect investors, and permitted the company’s listing in violation of regulations.
The court emphasized the seriousness of the allegations, stating that the prima facie evidence suggests regulatory lapses and collusion, warranting a fair and impartial probe. Observing law enforcement inaction, the court deemed judicial intervention necessary under Section 156(3) CrPC.
The ACB has been tasked with investigating the alleged market manipulation and corporate fraud and submitting its findings within a month.
