A special Anti-Corruption Bureau (ACB) court in Mumbai has directed the registration of a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations.
Moments after the order, SEBI said it will challenge the special ACB court which directed the FIR to be filed against Buch and other officials.
In an order issued on Saturday, Special Judge Shashikant Eknathrao Bangar stated that there was prima facie evidence of regulatory lapses and collusion, warranting a fair and impartial probe. The court has decided to monitor the investigation and has requested a status report within 30 days.
Allegations of Stock Market Manipulation
The complaint, filed by a media reporter, alleges large-scale financial fraud, regulatory violations, and corruption related to the fraudulent listing of a company on the stock exchange. It claims that SEBI officials failed in their statutory duties, facilitated market manipulation, and allowed a company to be listed despite it not meeting the required regulatory norms.
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Despite multiple appeals to law enforcement agencies and regulatory bodies, no action was taken, prompting the complainant to seek judicial intervention, the report added.
Court Orders Immediate Investigation
The ACB court noted that the allegations indicate a cognizable offence requiring immediate investigation. The court further emphasized that SEBI’s inaction, along with other law enforcement agencies, necessitated judicial oversight.
After reviewing the material on record, the court directed the ACB Worli, Mumbai Region, to register an FIR under relevant sections of the Indian Penal Code (IPC), Prevention of Corruption Act, SEBI Act, and other applicable laws.
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The order could have significant repercussions for SEBI, India’s market regulator, as it raises questions about regulatory oversight and accountability. SEBI has yet to issue an official statement regarding the court’s directive.
This development comes at a time when financial market transparency and regulatory integrity are under increasing scrutiny, potentially affecting investor confidence in the Indian stock market.
Next Steps in the Investigation
With the FIR now set to be registered, authorities will begin an in-depth probe into the alleged financial fraud and regulatory lapses. The court’s directive to submit a status report within 30 days ensures that the case will be closely monitored for any developments.
