A special court designated under the Money Laundering Act on Saturday directed the Anti-Corruption Bureau (ACB) to register an FIR against controversial former Sebi chairperson Madhabi Puri Buch and five other officials in connection with an alleged stock market fraud and regulatory violations.
The court said it will monitor the probe and sought a status report within 30 days.
“There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” the special ACB court judge, Shashikant Eknathrao Bangar, said in the order passed on Saturday.
The court order — following a complaint from a reporter — also noted that the allegations disclose a cognisable offence, necessitating an investigation. The inaction by law enforcement (agencies) and the Securities and Exchange Board of India (Sebi) necessitates judicial intervention under the provisions of the CrPC (Criminal Procedure Code), it added.
Apart from Buch, the other officials against whom the court has ordered registration of 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.
In an indication that the ruling establishment will stand by Buch, whose tenure saw heightened controversy as she battled a series of allegations by US-based shortseller Hindenburg and the Congress party, Sebi issued a statement saying it will soon initiate legal steps to challenge the order passed by the ACB Court.
“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. Sebi would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters,” said the Sebi statement.
Sapan Shrivastava, the complainant, had sought an investigation into the alleged offences, involving large scale financial fraud, regulatory violations and corruption.
The allegations pertain to the fraudulent listing of a company on the stock exchange with the active connivance of regulatory authorities, particularly Sebi, without compliance under the Sebi Act, 1992 and rules and regulations thereunder.
