Mumbai, Feb 2: A special court has instructed the Anti-Corruption Bureau (ACB) to file a First Information Report (FIR) against former SEBI chairperson Madhabi Puri Buch and five other officials regarding allegations of stock market fraud and regulatory infractions.
“There exists prima facie evidence of regulatory shortcomings and collusion, necessitating a fair and unbiased investigation,” stated Judge Shashikant Eknathrao Bangar of the special ACB court in his order issued on Saturday.
The court emphasized its intent to oversee the investigation and requested a status report within 30 days.
Additionally, the court indicated that the allegations represent a cognizable offense that requires thorough investigation.
It further noted that the failure of law enforcement agencies and the Securities and Exchange Board of India (SEBI) to act warrants judicial intervention per the provisions of the Criminal Procedure Code (CrPC).
The complainant, a journalist, had called for an inquiry into the alleged offenses by the accused parties, which involve extensive financial fraud, regulatory breaches, and corruption.
The accusations relate to the fraudulent listing of a company on the stock exchange with the active complicity of regulatory authorities, particularly SEBI, in violation of the SEBI Act, 1992, as well as its associated rules and regulations.
The complainant alleged that SEBI officials neglected their statutory responsibilities, facilitated market manipulation, and allowed corporate fraud by permitting the listing of a non-compliant company.
Despite numerous approaches to the police and relevant regulatory bodies, no action had been taken, according to the complainant.
After reviewing the evidence, the court directed the ACB in Worli, Mumbai Region, to register an FIR under the applicable sections of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other relevant laws.
Madhabi Puri Buch, India’s first female SEBI chief, who faced conflict of interest allegations by the US-based firm Hindenburg Research and subsequent political backlash, concluded her three-year term on Friday.
During her tenure, Buch achieved notable progress in areas like faster settlements in equities, improved disclosures by Foreign Portfolio Investors, and increased mutual fund participation through a Rs 250 Systematic Investment Plan (SIP). However, her final year saw considerable controversy amid a wave of allegations from Hindenburg and the Congress party, along with employee protests against a “toxic work culture.”
Last August, Buch faced mounting pressure to resign after Hindenburg accused her of a conflict of interest that hindered a comprehensive investigation into claims of manipulation and fraud involving the Adani Group.
Hindenburg alleged that both Madhabi Puri Buch and her husband, Dhaval Buch, had investments in offshore entities that were reportedly linked to a fund structure involving Vinod Adani, the elder sibling of Gautam Adani, founder of the Adani Group.
Buch has denied these allegations, asserting that the investments were made prior to her joining the regulatory body and that she complied with all necessary disclosure protocols.
Recently, Hindenburg announced its shutdown. (Agencies)
