A Mumbai court has directed the Anti-Corruption Bureau (ACB) to register an FIR against former SEBI chairperson Madhabi Puri Buch and several top officials in connection with an alleged financial fraud linked to the listing of a company on the Bombay Stock Exchange (BSE) in 1994. SEBI has announced its intention to challenge the order.
Court Orders Probe Into 1994 Listing Fraud
The directive, issued by Special Judge Shashikant Eknathrao Bangar, mandates an investigation under Section 156(3) of the Code of Criminal Procedure (CrPC). The case involves accusations of financial irregularities, regulatory violations, and possible corruption related to the listing of a company on the BSE over three decades ago.
Alongside Buch, the order names three current SEBI whole-time directors—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Two BSE officials, Pramod Agarwal and Sundararaman Ramamurthy, are also implicated in the case.
“The concerned Anti-Corruption Bureau, Worli, Mumbai Region, Mumbai is directed to register an FIR under the relevant provisions of IPC, Prevention of Corruption Act, SEBI Act, and other applicable laws,” the court ruled.
A status report on the investigation is expected within 30 days.
Complainant Alleges Regulatory Violations
The case originated from an application filed by journalist Sapan Shrivastava from Dombivli. He alleged that the company’s listing on the BSE in 1994 was executed without adhering to key SEBI regulations, including the SEBI Act of 1992, the SEBI (ICDR) Regulations of 2018, and the SEBI (LODR) Regulations of 2015.
Shrivastava claimed that despite raising multiple complaints with SEBI and law enforcement, no action was taken until the court’s intervention.
One of the primary allegations revolves around potential lapses in due diligence and compliance standards that were supposedly overlooked during the listing process.
SEBI to Challenge Court’s Order
In response to the court’s ruling, SEBI has stated that it will appeal the decision. A spokesperson for the market regulator said that the agency will “examine all legal options available” and reiterated SEBI’s commitment to upholding transparency and integrity in financial markets.
Legal experts believe that SEBI may argue against the retrospective application of regulations that were introduced much later than the 1994 listing in question.
“The case hinges on whether regulatory breaches, if any, can be examined under laws that were enacted decades later,” said a Mumbai-based securities lawyer familiar with the matter.
Industry Reactions and Implications
The case has sparked reactions across financial circles. Former regulatory officials and market analysts have expressed concerns over the potential impact on SEBI’s reputation and investor confidence.
Some experts argue that reopening decades-old cases could set a precedent for revisiting past regulatory decisions. Others view the investigation as a necessary step in ensuring accountability.
For now, all eyes are on SEBI’s next move and the outcome of the investigation ordered by the court. The coming weeks will determine whether the market regulator can successfully challenge the FIR or if further legal proceedings will follow.
