Order to register FIR against former SEBI chief Madhavi Puri Buch, accused of fraud in stock market
Mumbai’s ACB court ordered FIR against former SEBI chief Madhabi Puri Buch and 5 others for alleged stock market fraud and regulatory violations.
The court ordered Anti-Corruption Bureau (ACB) Worli to register FIR against Madhabi Puri Buch, all-time members Ashwani Bhatia, Anant Narayan, Kamlesh Chandra Varshney, BSE CEO Sundararaman Ramamurthy and former chairman Pramod Agrawal.
In the order passed, the judge of the special ACB court, Shashikant Eknathrao Bangar said, “Prima facie evidence of lapses and collusion in the rules has been found against these persons, hence a fair investigation is required.” The court said that it will monitor the investigation, and sought a status report of the case within 30 days.
What else did the court say?
The court order also mentioned that the allegations against the five accused are in the nature of cognizable offence, which requires investigation.
The court said, “The inaction of law enforcement (agencies) and the Securities and Exchange Board of India (SEBI) requires judicial intervention under the provisions of the Code of Criminal Procedure (CrPC).”
The complainant in this case had sought an alleged investigation against the accused. The complainant is a media reporter and has said that the case involves large-scale financial fraud, regulatory violations and corruption.
What allegations did the complainant make?
The allegation states that a company was listed on the stock exchange without complying with the SEBI Act of 1992 and the rules and regulations under it. The allegation states that there was active connivance of regulatory agencies, especially SEBI, in this listing.
The complainant claimed that SEBI officials have failed to discharge their statutory responsibility. It was alleged that SEBI encouraged market manipulation and allowed listing of a company that did not meet the prescribed criteria.
The complainant said that despite approaching the police station and the concerned regulatory bodies multiple times, no action was taken by them.
Buch was accused by Hindenburg
India’s first woman SEBI chief Buch faced political pressure after she was accused of conflict of interest by US-based short-seller Hindenburg. The former SEBI chief completed her three-year term on Friday and retired.
In August last year, Buch was pressured to resign after Hindenburg Research accused her of conflict of interest. Hindenburg had alleged that she blocked a thorough investigation into claims of manipulation and fraud in the Adani Group.
Hindenburg accused Madhabi Puri Buch and her husband Dhaval Buch of investing in offshore entities that were allegedly part of a fund structure in which Vinod Adani (elder brother of Adani Group founder chairman Gautam Adani) also invested.
Buch had denied the allegation, saying the investments were made before he joined the regulator and that he had complied with all requirements. Hindenburg recently announced the closure of its business.
