In a relief to Madhabi Puri Buch, the former chairperson of the Securities and Exchange Board of India and other officials of the market regulator as well as the BSE, the Bombay High Court has stayed for four weeks a special court order, which had directed the Anti Corruption Bureau to register an FIR against them.
Apart from Buch, the special court had ordered FIR against SEBI's whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, as well as BSE officials, including MD and CEO S. Ramamurthy and then chairman Pramod Agarwal.
The case relates to a listing of a company Cals Refineries on the stock market back in 1994.
The complainant, Sapan Shrivastava, who claims to be a journalist, had sought an investigation into the listing of the company alleging large-scale financial fraud regulatory violations and corruption. He had alleged that SEBI officials facilitated market manipulation and committed corporate fraud by allowing the company's listing that didn't meet the prescribed norms.
The FIR order had been challenged in the Bombay High Court by Buch and the other officials.
The High Court prima facie observed that the special court order was passed mechanically without going into details or attributing any role to Buch and others, Bar and Bench reported.
Appearing for the SEBI officials, Solicitor General Tushar Mehta said the complainant was habituated to filing frivolous cases and had been fined before for the same by the courts. Mehta also argued that the petitioners were the present office bearers, while the case was related to a company that was listed in 1994, over 30 years ago.
Appearing for the BSE officials, senior Advocate Amit Desai also termed the allegations by the complainant against the officials as baseless and scandalous, LiveLaw reported.
Meanwhile, the complainant Shrivastava said his allegations were based on facts and requested permission to file additional documents annexing all his past complaints.
Cals Refineries was earlier known as Cals Limited and incorporated back in 1984, according to information available on stock broking firms. Originally promoted as a hardware firm, it was later transformed into a refinery company.
The company was later in 2013, found guilty in a case involving irregularities in issuance of global depository receipts (GDR). In relation to the case, the market regulator barred 8 entities from the securities market for 10 years in 2014.
In response to the special court order, the regulator had said that the applicant is known to be a "frivolous and habitual litigant" with previous applications dismissed by the court, with the imposition of costs in some cases.
