Mumbai, March 3: The Bombay High Court on Monday directed the Anti-Corruption Bureau (ACB) to refrain from taking any action against former SEBI Chairperson Madhabi Puri Buch and five other officials until March 4. The directive comes after Buch, along with BSE Managing Director Sundararaman Ramamurthy and four other officials, approached the court to challenge an order for registering a First Information Report (FIR) against them.
As per agency report, a special ACB court in Mumbai had ordered the filing of an FIR against Buch and others on Saturday in connection with alleged fraudulent activities and regulatory violations in the stock market. Following their plea, Justice S.G. Dige of the Bombay High Court stated that the petitions would be heard on Tuesday, and no action would be taken on the ACB court’s order until then.
Solicitor General Tushar Mehta represented Buch and three current full-time SEBI directors—Ashwani Bhatia, Ananth Narayan G., and Kamlesh Chandra Varshney—while senior advocate Amit Desai appeared for BSE Managing Director and CEO Sundararaman Ramamurthy, as well as former BSE Chairman and public interest director Pramod Agarwal. The petitioners have termed the ACB court's order as arbitrary and legally untenable, seeking its dismissal.
Their plea argues that the order lacks legal standing as no prior notice was issued to the accused, nor were they given an opportunity to present their case before the decision was made. The ACB court, presided over by Judge Shashikant Eknathrao Bangar, stated in its order that prima facie evidence of regulatory lapses and collusion exists, warranting an impartial investigation. The court also asserted that it would oversee the probe and demanded a status report within 30 days.
The court further noted that the allegations indicate a cognizable offense, making an investigation necessary. It emphasized the need for judicial intervention under the Criminal Procedure Code (CrPC) due to inaction by law enforcement agencies and the Securities and Exchange Board of India (SEBI).
The case originated from a complaint filed by media journalist Sapan Srivastava, who sought an inquiry into alleged financial fraud, regulatory violations, and corruption. The complainant accused SEBI officials of failing in their statutory duties, facilitating market manipulation, and permitting the listing of a company that did not meet regulatory standards, thereby enabling corporate fraud. Srivastava also stated that despite repeated attempts to approach law enforcement and regulatory authorities, no action was taken.
Buch, who recently completed her three-year tenure as India's first female SEBI chairperson, had earlier faced allegations from U.S.-based research and investment firm Hindenburg Research over potential conflicts of interest. SEBI has responded by stating that it will take appropriate legal measures to challenge the court order and remains committed to ensuring compliance with regulatory norms.
