Bombay HC stays FIR against ex-SEBI chief, five others in stock market fraud case
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The Bombay High Court has stayed a special court’s order directing the registration of a first information report (FIR) against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and other SEBI and Bombay Stock Exchange (BSE) officials in connection with a listing fraud case, granting relief after Buch and two others challenged the directive.
A single-judge bench of Justice S.G. Dige ruled in their favour, stating that the special court had issued its order “mechanically without going to details and without attributing any role to the applicants”.
The special Anti-Corruption Bureau (ACB) court in Mumbai had instructed the police to register an FIR against three SEBI whole-time members—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—along with two senior BSE officials, Pramod Agarwal and Sundararaman Ramamurthy, though Buch, Bhatia, and Agarwal approached the High Court against this order on March 3.
Judge Shashikant Eknathrao Bangar had issued the order following a civilian complaint filed under Section 156(3) of the Criminal Procedure Code (CrPC), a provision allowing litigants to seek court intervention when the police refuse to register a case.
The complaint had been filed by Mumbai journalist Sapan Shrivastava, who alleged that SEBI and BSE officials facilitated the illegal listing of Cals Refineries Ltd., causing significant financial losses to investors, including himself and his family, though he claimed that the authorities failed to act against the company’s violations.
Shrivastava argued that SEBI had neglected its duty to protect investors and instead allowed fraudulent practices to persist, leading to his demand for legal action against the regulatory officials.
In a separate controversy, Buch and her husband, Dhavan Buch, had drawn scrutiny in August last year after an investigation by the short-seller Hindenburg Research alleged that they had undisclosed investments in offshore entities linked to the Adani Group, leading to concerns over conflicts of interest.
SEBI initially asserted that Buch had recused herself from matters presenting potential conflicts, yet in response to a Right to Information (RTI) request, it stated that details of such recusals were “not readily available” and compiling them would require a disproportionate diversion of resources.