 to register an FIR against former Securities and Exchange Board of India (Sebi).){kind=link}
Mumbai Court has ordered FIR against Ex-SEBI Chief, Chairperson, Madhabi Puri Buch and 5 others. According to the complainant, Sebi officials permitted the listing of a company that failed to meet regulatory norms, leading to market manipulation and investor losses.
A special court in Mumbai has ordered the Anti-Corruption Bureau (ACB) to register an FIR against former Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch and five others over alleged stock market fraud and regulatory violations.
The order was passed by Judge Shashikant Eknath Rao on a petition by a local journalist, who sought an investigation into the alleged offenses committed by Buch and others, involving large-scale financial fraud, regulatory violations and corruption.
“There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” the order read. Judge Eknath Rao also ruled that the inaction by law enforcement agencies and the Sebi necessitates judicial intervention under the provisions of the CrPC (Criminal Procedure Code).
The court order came a day after Buch completed her three-year tenure as Sebi chief on Friday. She was succeeded by Tuhin Kanta Pandey. The Securities and Exchange Board of India (SEBI) said it would take legal steps to challenge the order. The order comes just two days after Ms. Buch completed her tenure as SEBI chief.
In a detailed order dated March 1, special ACB court judge Shashikant Eknath Rao Bangar observed: “The allegations disclose a cognizable offense, necessitating an investigation. There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. The inaction by law enforcement and SEBI necessitates judicial intervention under Section 156(3) CrPC.”
The ACB of Worli in Mumbai was directed to register an FIR under the relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable laws. “The investigation shall be monitored by this Court. A status report shall be submitted within 30 days,” the order said.
The complaint in this case was filed by Sapan Shrivastava, 47, a legal reporter from Dombivli in Maharashtra’s Thane district. The complaint names Ms. Buch, as well as SEBI’s current whole-time members Ashwani Bhatia, Ananth Narayan G., and Kamlesh Chandra Varshney; and Bombay Stock Exchange (BSE) officials Pramod Agarwal, and Sundararaman Ramamurthy. The complainant sought an FIR registration and an investigation into alleged large-scale financial fraud, regulatory violations, and corruption.
Allegations against Madhabi Buch
According to the complainant, Sebi officials permitted the listing of a company that failed to meet regulatory norms, leading to market manipulation and investor losses. It also alleged collusion between Sebi and corporate entities, insider trading, and siphoning of public funds post-listing.
Despite approaching the police station and regulatory bodies concerned on multiple occasions, no action has been taken by them, the complainant said. The court said it will monitor the probe and sought a status report within 30 days.
Allegations by Hindenburg Research
In August last year, now-defunct short-seller Hindenburg Research claimed that Madhabi Buch and her husband Dhaval Buch had undisclosed investments in offshore entities linked to the Adani Group.
According to Hindenburg, Buchs held stakes in Bermuda and Mauritius-based funds allegedly connected to Vinod Adani, the brother of Gautam Adani. These investments purportedly occurred before Buch’s tenure at Sebi but were not disclosed during her regulatory role, raising concerns about potential conflicts of interest in Sebi’s investigations into the Adani Group.
Hindenburg also highlighted that during her time as Sebi chairperson, Madhabi Buch owned a Singaporean consulting firm, Agora Partners, which she later transferred to her husband. The firm did not publicly report its financials, leading to questions about the transparency of her financial dIn response, Buch and her husband strongly denied these allegations, labelling them as baseless and asserting that their finances are transparent and compliant with all disclosure requirements.
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