Former SEBI Chief Madhabi Buch facing allegations of stock market fraud as Mumbai court orders FIR.

A recent incident involving former SEBI Chairperson Madhabi Puri Buch and senior SEBI and BSE officials has come to light after a special Anti-Corruption court in Mumbai ordered an FIR against them over alleged stock market fraud and regulatory violations. The complaint, based on a petition by Thane-based journalist Sapan Shrivastava, brought to light massive financial fraud and corruption in a company’s stock exchange listing. The petitioner alleged that SEBI officials failed in their duty by allowing the company to be listed without meeting necessary norms, resulting in market manipulation and investor losses.

Several high-profile individuals were implicated in the complaint, including former SEBI Chairperson Madhabi Puri Buch, along with Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Additionally, the BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy were named as respondents in the case. During the court proceedings, none of the accused were present or represented.

Upon reviewing the evidence, the court found prima facie indications of regulatory lapses and collusion, prompting the need for a thorough investigation to ascertain the veracity of the allegations. Emphasizing the necessity of an impartial inquiry, the court directed the Anti-Corruption Bureau (ACB) in Mumbai to register an FIR under the Indian Penal Code, Prevention of Corruption Act, and SEBI Act.

The court highlighted various findings in the case, revealing procedural irregularities and non-compliance in the IPO process, leading to the questionable listing of the company. Regulatory filings and stock market reports suggested artificial inflation of share prices and market manipulation. Correspondence from whistleblowers within SEBI pointed to favoritism towards the accused company, while financial reports, audit documents, and investor grievances indicated widespread fraud and deception.

The complaint specifically alleged that SEBI overlooked regulatory norms during the listing process, enabling the accused company to engage in illicit activities such as insider trading and price manipulation, deceiving investors about its financial health. In light of the gravity of the accusations, Judge Bangar urged the ACB to conduct a thorough investigation and submit a status report within 30 days, underscoring the significance of judicial intervention due to SEBI’s inaction and the potential harm to investor confidence.