A special court in Mumbai has ordered the Anti-Corruption Bureau (ACB) to register an FIR against former Sebi chairperson Madhabi Puri Buch and five others in an alleged stock market fraud case.
Special ACB court judge Shashikant Eknathrao Bangar remarked that there was prima facie evidence of regulatory lapses and collusion, which required a fair and impartial probe.
The court order came on a complaint filed by Sapan Shrivastava (47), a journalist, alleging large-scale financial fraud, regulatory violations and corruption in connection with the listing of a company on the stock exchange.
The complainant claimed that Sebi officials facilitated market manipulation and committed corporate fraud by allowing the listing of the company that did not meet the prescribed norms.
He said he had approached the police and regulatory bodies but no action was taken.
The court noted that the allegations disclose a cognisable offence, necessitating an investigation. It has asked for a status report of the case within 30 days.
Besides Buch, the other officials against whom the court has ordered the FIR are BSE's Managing Director and Chief Executive Officer Sundararaman Ramamurthy, its then chairman and public interest director Pramod Agarwal and Sebi's three whole-time members Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney.
The ACB has been asked to file the FIR under relevant provisions of the IPC, Prevention of Corruption Act, Sebi Act, and other applicable laws.
‘Will challenge order’
Reacting to the court directive, the Sebi has issued a statement, saying it will take appropriate legal steps to challenge the order. The market regulator alleged that it was denied an opportunity to place the facts on record.
"Even though these officials (Buch and others) 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," it said.
"The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the court, with imposition of costs in some cases," it further said.
