Mumbai Court Orders To File FIR Against Ex-SEBI Chief Madhabi Puri Buch, 5 Others

A Mumbai special court on Monday ordered to file an FIR against former SEBI Chairperson Madhabi Puri Buch and five others. This action follows allegations of financial fraud, regulatory breaches, and corruption. The court's decision came after a complaint by Sapan Shrivastava, a legal news reporter from Thane, who sought judicial intervention for an investigation into these alleged offenses.

The complainant accused SEBI officials of failing in their statutory duties, suggesting that fraudulent activities were conducted with their active connivance. It was claimed that a company was fraudulently listed on the stock exchange, facilitating market manipulation and corporate fraud. Allegedly, this listing occurred despite the company not meeting required norms.

Allegations of Regulatory Lapses

Sapan Shrivastava presented substantial evidence to the court, including written complaints to SEBI and police authorities. These documents highlighted procedural lapses and noncompliance in the IPO process, leading to an irregular company listing. Regulatory filings and stock market reports suggested artificial inflation of share prices and market manipulation.

The complainant further alleged that SEBI allowed the company's listing despite its failure to comply with essential regulatory norms such as disclosure requirements and due diligence procedures. Additionally, accusations included round-tripping, insider trading, price manipulation, and misleading investors about the company's financial health.

Judicial Intervention Required
The court noted that the allegations revealed a cognizable offense requiring investigation. "There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe," stated the court document. The inaction by law enforcement and SEBI necessitated judicial intervention under Section 156(3) CrPC.

In response to these findings, the court directed the Anti Corruption Bureau in Worli, Mumbai Region to register an FIR under relevant provisions of the IPC, Prevention of Corruption Act, SEBI Act, and other applicable laws. The investigation will be monitored by the court to ensure thoroughness.