Court orders FIR against ex-SEBI chief Madhabi Buch over stock fraud allegation

A specialized court in Mumbai has mandated the Anti-Corruption Bureau (ACB) to initiate a First Information Report (FIR) against former SEBI Chairperson Madhabi Puri Buch and five additional officials regarding purported stock fraud and breaches of regulatory protocols. The court indicated that it would oversee the investigation and requested a status update within a 30-day timeframe.

The complainant, a journalist, has called for an inquiry into the alleged misconduct of the accused, which involves extensive financial fraud, regulatory infractions, and corruption.The accusations relate to the deceptive listing of a company on the stock exchange, allegedly facilitated by regulatory bodies, particularly SEBI, without adherence to the SEBI Act of 1992 and its associated rules and regulations.

The court’s ruling also highlighted that the allegations reveal a cognizable offense, warranting an investigation. It remarked that the inaction of law enforcement and SEBI necessitates judicial intervention as per the Criminal Procedure Code (CrPC).

The complainant asserted that SEBI officials neglected their statutory responsibilities, contributed to market manipulation, and permitted corporate fraud by approving the listing of a company that failed to satisfy the established criteria. Despite multiple attempts to engage with the police and relevant regulatory authorities, the complainant reported a lack of action on their part.

After reviewing the evidence presented, the court instructed the ACB in Worli, Mumbai Region, to file an FIR in accordance with the pertinent sections of the Indian Penal Code (IPC), the Prevention of Corruption Act, the SEBI Act, and other relevant legislation.

Madhabi Puri Buch, India’s first female SEBI chief, who faced allegations of conflict of interest from the US-based short-seller Hindenburg and subsequent political scrutiny, concluded her three-year term on Friday.