Mumbai
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In a significant development within India’s financial regulatory landscape, a special court in Mumbai has ordered the Anti-Corruption Bureau (ACB) to file a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five other officials. The court’s directive stems from allegations of irregularities in the listing process of a company on the Bombay Stock Exchange (BSE) in 1994, purportedly facilitated by lapses in regulatory oversight.
Background of the Allegations
The case centers around the 1994 listing of a company on the BSE. A complaint filed by journalist Sapan Shrivastava accuses SEBI and BSE officials, including Buch, of permitting the company’s listing without adherence to the prescribed norms under the SEBI Act of 1992. The complaint alleges that this action led to significant financial fraud, regulatory violations, and potential corruption. Specific charges include criminal misconduct by public servants and illegal gratification. citeturn0search0
Court’s Observations and Order
The special anti-corruption court observed that the allegations pertain to the fraudulent listing of a company with the active connivance of regulatory authorities, particularly SEBI. The court noted that this occurred without compliance with the SEBI Act and its associated rules and regulations. Consequently, the court directed the ACB to register an FIR and conduct a thorough investigation into the matter. The ACB has been instructed to submit a status report within 30 days. citeturn0search0
Reactions from SEBI and BSE
Both SEBI and the BSE have reacted strongly to the court’s order. They have labeled the complaint as “frivolous and vexatious,” emphasizing that the officials named, including Buch, were not in their respective positions at the time of the company’s listing in 1994. SEBI stated that the court proceeded without issuing notice or granting an opportunity for SEBI to present its side of the story. Both institutions have expressed their intention to challenge the court’s order through appropriate legal channels. citeturn0news8
Profile of Madhabi Puri Buch
Madhabi Puri Buch served as the Chairperson of SEBI until March 2023. Her tenure was marked by significant scrutiny, especially following allegations by Hindenburg Research in August 2024. The firm accused Buch and her husband of having stakes in offshore entities that invested in India, which were allegedly used to manipulate shares of companies within the Adani Group. Buch refuted these claims, terming them an attempt at “character assassination.” citeturn0search16
Implications for India’s Financial Sector
This development underscores the challenges faced by India’s financial regulatory framework. The allegations suggest potential lapses in regulatory oversight during the listing process of companies, which could have far-reaching implications for investor trust and market integrity. The forthcoming investigation and legal proceedings are expected to shed light on the regulatory processes of the 1990s and their evolution over time.
Conclusion
The Mumbai court’s order to file an FIR against former SEBI Chairperson Madhabi Puri Buch and other officials marks a pivotal moment in India’s financial regulatory history. As investigations proceed, stakeholders will be keenly observing the outcomes, which may influence future regulatory practices and policies within the country’s financial markets.
navlistMumbai Court Orders FIR Against Former SEBI Chief and Officialsturn0news8
