Special ACB Court directs FIR against ex-SEBI Chairperson and five others over alleged market manipulation, regulatory lapses, and corruption.
Mumbai, March 2 – A Mumbai special court has ordered the registration of an FIR against former SEBI Chairperson Madhabi Puri Buch and five others in connection with alleged financial fraud, regulatory violations, and corruption, a court order revealed.
The case stems from a petition filed before the Special Anti-Corruption Bureau (ACB) Court in Mumbai by Sapan Shrivastava, a Thane-based legal news reporter, who alleged a large-scale fraudulent listing of a company on the stock exchange, facilitated through collusion with regulatory authorities.
Serious Allegations Against SEBI Officials
Shrivastava’s petition contended that SEBI officials failed in their statutory duties, enabling market manipulation and corporate fraud by permitting the listing of a company that allegedly did not meet the required norms.
The complainant further stated that despite repeated complaints to law enforcement and regulatory bodies, no action was taken, prompting him to seek judicial intervention.
Court Finds Prima Facie Evidence of Wrongdoing
In its order, the court noted that the allegations, supported by substantial documentary evidence, disclose a cognizable offense warranting investigation.
Among the evidence submitted were:
- Written complaints filed with SEBI, police, and regulatory bodies, along with their acknowledgments.
- Documents highlighting procedural lapses and non-compliance in the IPO process, leading to an irregular listing.
- Regulatory filings and stock market reports pointing to artificial inflation of share prices and market manipulation.
- Whistleblower correspondence from within SEBI, suggesting undue favoritism toward the accused company.
The complainant alleged that SEBI permitted the listing despite the company’s failure to meet essential regulatory norms, such as disclosure requirements and due diligence procedures. Additionally, the accused individuals were accused of round-tripping, insider trading, and price manipulation, misleading investors into believing the company was financially sound.
Court Orders FIR and Judicial Oversight
The court directed the Anti-Corruption Bureau (ACB), Worli, Mumbai Region, to register an FIR under relevant provisions of the IPC, Prevention of Corruption Act, SEBI Act, and other applicable laws.
“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 court document stated.
The court also ordered that a status report be submitted within 30 days, confirming that it would monitor the progress of the investigation.
As the case unfolds, the outcome of this probe could have major implications for SEBI’s regulatory credibility and stock market governance in India.