Mumbai court orders FIR against ex-SEBI Chief Madhabi Puri Buch, 5 others in alleged stock market fraud

The allegations include collusion between SEBI and corporate entities, insider trading, and the siphoning of public funds post-listing.

A special Anti-Corruption Bureau (ACB) court in Mumbai has directed the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations, PTI reported.

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 asked for a status report within 30 days, according to the PTI report.

The complaint, filed by a media reporter, alleges large-scale financial fraud, regulatory violations, and corruption in connection with the fraudulent listing of a company on the stock exchange. It claims that SEBI officials failed in their statutory duties, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet the prescribed norms.

Despite multiple appeals to law enforcement agencies and regulatory bodies, no action was taken, the complainant stated, PTI added. The court noted that the allegations indicate a cognizable offence that requires investigation and emphasized that the inaction of SEBI and other law enforcement agencies necessitated judicial intervention.

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.