SEBI to challenge court order allowing FIR against ex-chief Madhabi Puri Buch, other officials

Mumbai (Maharashtra) [India]: The Securities and Exchange Board of India (SEBI) has announced plans to challenge a Mumbai court's order allowing the registration of an FIR against former SEBI chairperson Madhabi Puri Buch, three current Whole Time Members, and two officials of the Bombay Stock Exchange (BSE).

A special court in Mumbai directed the police to register an FIR against Buch and others over alleged financial fraud, regulatory violations, and corruption linked to a company’s stock exchange listing.

SEBI to take legal action
In a press statement issued on Sunday, SEBI stated, "SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters."

The court's order follows an application by Sapan Shrivastava, a Thane-based legal news reporter, seeking directions to the police for registering an FIR and conducting an investigation.

Allegations of fraud and regulatory failure
The complainant alleged large-scale financial fraud involving the fraudulent listing of Cals Refineries Ltd. on the stock exchange. The complaint claimed that SEBI officials failed in their statutory duties by facilitating market manipulation and enabling corporate fraud.

It was alleged that the listing was approved despite the company not meeting prescribed norms, with regulatory authorities being complicit in the process.

SEBI defends accused officials
SEBI defended its officials, stating that they were not in their respective positions at the time of the alleged fraud. "Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record," SEBI argued.

The complaint pertains to alleged irregularities in granting listing permission to the company on the Bombay Stock Exchange in 1994, purportedly violating the SEBI Act, SEBI (ICDR) Regulations, and SEBI (LODR) Regulations.

Court orders FIR and investigation
After reviewing the material on record, the court determined that the allegations disclosed a cognizable offense requiring investigation. It directed the Anti-Corruption Bureau (ACB), Worli, Mumbai Region, to register an FIR under the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable laws.

The court will monitor the investigation and has ordered a status report to be submitted within 30 days.

Hitting out at Shrivastava, SEBI labelled him a "frivolous and habitual" litigant, noting that previous applications filed by him had been dismissed by the court, with costs imposed in some cases.

With ANI inputs