Mumbai court orders FIR against ex-SEBI chief, BSE officials over alleged stock market fraud
Mumbai: A special Anti-Corruption court in Mumbai on Saturday directed the registration of an FIR against top officials of the Securities and Exchange Board of India (SEBI), including former Chairperson Madhabi Puri Buch, as well as the Bombay Stock Exchange (BSE), over allegations of stock market fraud and regulatory violations, media reports said.
The order was issued by Special Judge SE Bangar in response to a petition filed by Thane-based journalist Sapan Shrivastava, who alleged large-scale financial fraud and corruption in the listing of a company on the stock exchange, reported India Today.
The complainant claimed that SEBI officials had failed in their statutory duties, facilitated market manipulation, and allowed corporate fraud by approving the listing of a company that did not meet prescribed norms.
The complaint further alleged collusion between SEBI officials and corporate entities, along with insider trading and the misappropriation of public funds post-listing.
Among those named in the complaint are former SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, along with BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy.
However, none of the respondents were represented in the court proceedings.
Additional Public Prosecutors Prabhakar Tarange and Rajlaxmi Bhandari appeared on behalf of the Maharashtra government.
After reviewing the complaint and supporting documents, Judge Bangar found prima facie evidence of wrongdoing and instructed the Anti-Corruption Bureau (ACB), Mumbai, to register an FIR under the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act.
"The allegations disclose a cognizable offense, necessitating a fair and impartial probe," the court stated, according to the report.
The judge further remarked, "There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. The inaction by law enforcement and SEBI necessitates judicial intervention."
Considering the seriousness of the allegations, the court directed the ACB to conduct an investigation and submit a status report within 30 days.
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