Mumbai Court Orders FIR Against Ex-SEBI Chief Madhabi Puri Buch
The court’s order, issued on Saturday, marks a dramatic turn of events just a day after Buch concluded her three-year tenure as SEBI chief on March 1, 2025.
FIR Against Ex-SEBI Chief Madhabi Puri Buch- In a significant development, a special court in Mumbai has directed the Anti-Corruption Bureau (ACB) to register a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five other officials over allegations of stock market fraud, regulatory violations, and corruption.
The court’s order, issued on Saturday, marks a dramatic turn of events just a day after Buch concluded her three-year tenure as SEBI chief on March 1, 2025.
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The directive follows a complaint filed by Sapan Shrivastava, a Thane-based legal news reporter, who approached the court seeking judicial intervention under Section 156(3) of the Code of Criminal Procedure (CrPC).
Shrivastava’s application accused Buch, three current SEBI Whole-Time Members—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—and two Bombay Stock Exchange (BSE) officials, Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy, of involvement in fraudulent activities linked to the listing of a company on the stock exchange in 1994.
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The complaint alleges that regulatory lapses and active connivance by SEBI and BSE officials facilitated large-scale financial fraud, including artificial inflation of share prices and market manipulation.
The special court, presided over by Judge S E Bangar under the Prevention of Money Laundering Act, reviewed the material presented and concluded that the allegations disclosed a cognizable offense warranting investigation.
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The ACB in Worli, Mumbai Region, has been instructed to register the FIR under relevant provisions of the Indian Penal Code (IPC), the Prevention of Corruption Act, the SEBI Act, and other applicable laws. The court has also taken the unusual step of announcing it will monitor the probe, demanding a status report within 30 days.
SEBI’s Response: Legal Challenge Ahead
In a swift rebuttal, SEBI issued a statement on Sunday, March 2, asserting that it would initiate “appropriate legal steps” to challenge the court’s order. The market regulator contested the validity of the complaint, describing it as “frivolous” and arguing that the court proceeded without providing SEBI an opportunity to present its side. SEBI emphasized that the accused officials, including Buch, were not in their respective positions during the alleged 1994 irregularities, questioning the relevance of the accusations against them. “SEBI remains committed to ensuring due regulatory compliance in all matters,” the statement added.
Background and Context
Madhabi Puri Buch, the first woman to lead SEBI, assumed office on March 2, 2022, and completed her tenure amid swirling controversies. Her leadership faced scrutiny following allegations of conflict of interest raised by US-based short-seller Hindenburg Research in August 2024. The report accused Buch of obstructing investigations into alleged manipulation and fraud involving the Adani Group, intensifying political and public pressure for her resignation. While Buch denied the claims, the Hindenburg episode cast a shadow over her tenure, which otherwise saw significant regulatory reforms in India’s financial markets.
The current case centers on the listing of Cals Refineries Ltd., a company purportedly granted permission to list on the BSE in 1994 despite non-compliance with SEBI regulations. The complainant alleges that this enabled corporate fraud and siphoning of public funds, with SEBI officials failing in their statutory duties.
