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Madhabi Puri Buch. File
| Photo Credit: ANI
The Bombay High Court on Monday asked the Anti-Corruption Bureau (ACB) not to act on a Mumbai sessions court order to register an FIR against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five others, until March 4, 2025. The sessions court on March 1, 2025 directed the ACB to register a First Information Report (FIR) against Buch and officials of SEBI and Bombay Stock Exchange (BSE) in an alleged stock market fraud, regulatory violations, and corruption linked to the listing of a company in 1994.
The High Court has agreed to hear the matter on the basis of urgency on Tuesday after Solicitor General Tushar Mehta appeared for SEBI and senior counsel Amit Desai appeared for BSE officials to mention the petitions for urgent hearing before a Single-Bench judge, Justice Shivkumar Dige. The judge also directed the ACB not to act on the sessions courtorder till tomorrow.
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Mr. Mehta appeared for Ms. Buch and three current whole time SEBI directors: Ashwani Bhatia, Ananth Narayan G. and Kamlesh Chandra Varshney. Mr. Desai appeared for BSE Managing Director and Chief Executive Officer Sundararaman Ramamurthy and its former Chairman and Public Interest Director Pramod Agarwal.
The advocates approached the court seeking to quash the order passed by the Special ACB Court judge, Shashikant Eknathrao Bangar, that said, “The allegations disclose a cognizable offense, necessitating an investigation. There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. The inaction by law enforcement and SEBI necessitates judicial intervention under Section 156(3) CrPC.”
The ACB of Worli in Mumbai was directed to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable laws. “The investigation shall be monitored by this Court. A status report shall be submitted within 30 days,” the order said.
The advocates argued before the High Court that the sessions court’s order was legally unsustainable since the respondents in the case had not even been issued a notice or heard before a decision was taken against them.
The fraud
The complaint in this case was filed by Sapan Shrivastava, 47, a legal reporter from Dombivali in Maharashtra’s Thane district. The complainant sought registration of FIR and investigation into alleged large-scale financial fraud, regulatory violations, and corruption.
The charges pertain to the alleged fraudulent listing of a company, Cals Refineries Ltd, on the stock exchange in 1994, with the active connivance of regulatory authorities, particularly SEBI, without compliance under the SEBI Act, 1992. The complainant contended that SEBI officials failed in their statutory duty, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet the prescribed norms.
Cals Refineries was suspended from trading on the stock exchange since 2019, according to data on the BSE website.
In a statement issued on Sunday, SEBI officials said that the market regulator would initiate appropriate legal steps to challenge the sessions court order and that it remained committed to ensuring due regulatory compliance in all matters.
In a separate statement, the BSE called the application “frivolous and vexatious in nature”.
Published – March 03, 2025 12:53 pm IST
