Mumbai, March 2: A special anti-corruption court in Mumbai has directed the registration of an FIR against top officials of the Securities and Exchange Board of India (SEBI), including former SEBI Chairperson Madhabi Puri Buch, and the Bombay Stock Exchange (BSE) in connection with an alleged stock market fraud and regulatory violations.
The order was issued by Special Judge SE Bangar on Saturday, following a petition filed by Thane-based journalist Sapan Shrivastava, who accused the officials of being involved in large-scale financial fraud and corruption related to the listing of a company on the stock exchange.
Shrivastava, a legal news reporter from Thane, filed an application with the Special Anti-Corruption Bureau (ACB) Court seeking directions to the concerned police station to register an FIR and initiate an investigation into alleged offenses committed by the accused, including Buch.
He alleged that the company’s listing on the stock exchange was fraudulent, carried out with the active collusion of regulatory authorities. According to Shrivastava, SEBI officials failed in their statutory duties, allowing market manipulation and enabling corporate fraud by permitting the listing of a company that did not meet the prescribed regulatory norms.
The complainant also claimed that despite approaching the concerned police station and regulatory bodies multiple times, no action was taken, prompting the need for judicial intervention. The court noted that Shrivastava had provided substantial material to support his allegations, including written complaints submitted to SEBI, the police, and other authorities, documents showing procedural lapses, and noncompliance during the IPO process, which led to the irregular listing of the company.
Additionally, the complainant submitted regulatory filings and stock market reports indicating artificial inflation of share prices and market manipulation, along with whistleblower correspondence from within SEBI suggesting undue favoritism toward the accused company.
"The allegations disclose a cognizable offense, necessitating a fair and impartial probe," the court observed. It also noted the prima facie evidence of regulatory lapses and collusion, stating that inaction by law enforcement and SEBI justified the need for judicial intervention.
(With agency inputs)
