A special Anti-Corruption Bureau (ACB) court in Mumbai has ordered the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud, regulatory lapses, and corruption.
The court, presided over by Judge Shashikant Eknathrao Bangar, directed the Anti-Corruption Bureau (Worli, Mumbai Region) to investigate the matter under relevant provisions of the Indian Penal Code (IPC), Prevention of Corruption Act, and the SEBI Act. The court has also instructed that a status report be submitted within 30 days and stated that it will closely monitor the investigation.
Who Are the Accused?
Apart from Madhabi Puri Buch, the FIR has been ordered against the following individuals:
Ashwani Bhatia (Former Whole-Time Member, SEBI)
Ananth Narayan (Former Whole-Time Member, SEBI)
Kamlesh Chandra Varshney (SEBI Official)
Pramod Agarwal (SEBI Official)
Sundararaman Ramamurthy (Stock Exchange Official)
Court’s Observations and Order
Judge Bangar, in his order, noted that there is prima facie evidence suggesting regulatory failures and possible collusion among officials, warranting an independent and impartial probe. The court observed that despite multiple complaints made by the complainant, a media reporter, neither the police nor SEBI took any action, making judicial intervention necessary.
Citing the seriousness of the allegations and legal precedents, the court directed the ACB to investigate under Section 156(3) of the CrPC (Criminal Procedure Code). The order emphasized that the allegations indicate a cognizable offence, meaning that law enforcement agencies are obligated to investigate.
What Are the Allegations?
The complaint alleges that SEBI officials were involved in the fraudulent listing of a company on the stock exchange despite its failure to meet regulatory norms. The accused are said to have:
Allowed a non-compliant company to be listed, bypassing SEBI’s own rules.
Facilitated market manipulation by enabling fraudulent trading practices.
Failed in their regulatory duties, leading to corporate fraud.
According to the complainant, multiple attempts were made to seek action from regulatory authorities and law enforcement, but no steps were taken. This led to the filing of a petition before the Mumbai special ACB court.
Madhabi Puri Buch’s Controversial Tenure
Madhabi Puri Buch, who became SEBI’s first female chief, recently completed her three-year term on Friday. While she introduced faster settlements in equities, enhanced Foreign Portfolio Investor (FPI) disclosures, and promoted SIP investments in mutual funds, her tenure was not without controversy.
Last year, U.S.-based short-seller Hindenburg Research accused her of having a conflict of interest that allegedly prevented a full investigation into fraud and stock manipulation allegations involving the Adani Group. The firm claimed that she and her husband, Dhaval Buch, had prior financial ties to offshore entities linked to Vinod Adani, elder brother of Adani Group chairman Gautam Adani.
While Buch strongly denied the allegations, stating that the investments were made before she joined SEBI and were fully disclosed as per regulations, she faced political heat from opposition parties and pressure to resign.
Adding to the troubles, SEBI employees last year staged protests, raising concerns over a toxic work culture under her leadership.
Next Steps
With the Mumbai court now ordering a full-fledged investigation, the ACB is expected to file an FIR and proceed with a formal probe. A status report will be submitted in the next 30 days, and the court will oversee the case as it unfolds.
This development raises serious concerns about corporate governance and regulatory accountability in India’s financial markets. The coming weeks will determine the extent of the alleged misconduct and the role played by SEBI officials in the case.
SEBI to Challenge ACB Court Order Directing FIR Against Former Chairperson and Officials
Securities and Exchange Board of India (SEBI) has announced that it will take legal action against the recent order passed by the ACB Court in Mumbai. The court had directed the filing of an FIR against former SEBI chairperson Madhabi Puri Buch, three current whole-time members, and two officials of the Bombay Stock Exchange (BSE).
In a statement released on Sunday, SEBI criticized the complainant, calling them a “habitual and frivolous litigant.” The regulator pointed out that this individual has a history of filing cases, many of which have been dismissed, sometimes with penalties. SEBI emphasized that it will challenge the court’s order through legal means.
SEBI also expressed concerns about the fairness of the decision, stating that the court passed the order without notifying the regulatory body or giving it a chance to present relevant facts. Additionally, SEBI noted that some of the officials named in the FIR were not even in their respective positions when the alleged incidents took place. Despite this, the court proceeded with its directive.
The regulator reaffirmed its commitment to upholding compliance and ensuring that due legal procedures are followed in all matters.
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