A special Anti-Corruption Bureau (ACB) court in Mumbai has directed the 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 alleged stock market fraud and regulatory violations.
Judge Shashikant Eknathrao Bangar, presiding over the special ACB court, stated in the order that “prima facie evidence of regulatory lapses and collusion” warrants a thorough and impartial investigation. The court has decided to oversee the probe and has requested a status report within 30 days.
Court Flags Regulatory Violations, Orders Investigation
The court order emphasized that the allegations constitute a cognizable offense, necessitating a formal probe. It also criticized law enforcement agencies and SEBI for their inaction, stating that judicial intervention under the Criminal Procedure Code (CrPC) was required.
The case was filed by a media reporter who accused Buch and other SEBI officials of facilitating large-scale financial fraud, regulatory lapses, and corruption. The complaint alleged that SEBI permitted the fraudulent listing of a company on the stock exchange despite non-compliance with SEBI Act, 1992, and related regulations.
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The complainant further claimed that SEBI officials failed in their statutory duties, enabling market manipulation and corporate fraud. Despite multiple complaints to law enforcement and regulatory authorities, no action had been taken until now.
FIR Filed Under Multiple Laws
Based on the evidence presented, the court has directed ACB Worli, Mumbai Region, to register an FIR under relevant sections of the Indian Penal Code (IPC), Prevention of Corruption Act, SEBI Act, and other applicable laws.
Madhabi Puri Buch’s Controversial Tenure at SEBI
Madhabi Puri Buch, India’s first woman SEBI chief, completed her three-year tenure on Friday. Although credited with initiatives such as faster equity settlements, increased foreign portfolio investor (FPI) disclosures, and expanding mutual fund penetration through the Rs 250 SIP scheme, her term was marred by allegations and controversies.
Last year, Buch faced political and corporate scrutiny following accusations from US-based short-seller Hindenburg Research. The firm alleged that she had conflicts of interest that hindered a thorough investigation into fraud and market manipulation claims against the Adani Group. The controversy intensified when Hindenburg accused her and her husband, Dhaval Buch, of investing in offshore entities linked to Vinod Adani, elder brother of Adani Group chairman Gautam Adani.
While the Buchs denied these allegations, stating that their investments were made before her appointment at SEBI and were fully disclosed as per regulations, the matter continued to generate political and financial turbulence.
What Happens Next?
With the FIR now directed to be registered, the ACB will begin its formal investigation. The Mumbai court’s decision signals stricter scrutiny of regulatory bodies and financial governance in India, potentially setting a precedent for future cases of alleged corporate fraud and regulatory misconduct.
Case Details
Case Title: Sapan Shrivastava Versus Madhabi Puri Buch
Case No.: Acb Miscellaneous Application No. 603 Of 2024
Date: 1/03/2025
Counsel For Complainant: Sapan Shrivastava, Complainant in-person
Counsel For Respondent: APP Mr. Prabhakar Tarange along with Addl. P.P. Mrs. Rajlaxmi Bhandari
