Mumbai, March 3: The Bombay High Court on Monday directed Maharashtra's Anti-Corruption Bureau (ACB) to pause any action until March 4 regarding a special court's recent order to lodge an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials for alleged fraud and regulatory violations.
Buch, along with Bombay Stock Exchange (BSE) Managing Director Sundararaman Ramamurthy and four others, approached the High Court urgently seeking to quash the March 1 order passed by a special Anti-Corruption Bureau court. This order had mandated the registration of an FIR based on allegations dating back to a fraudulent company listing on the BSE in 1994.
Pleas Presented Before Bombay HC
Solicitor General Tushar Mehta represented Madhabi Puri Buch and three current whole-time SEBI directors—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Additionally, Senior Counsel Amit Desai appeared on behalf of Sundararaman Ramamurthy and Pramod Agarwal, the former chairman and public interest director of the BSE.The petitioners argued that the special court's directive was "illegal and arbitrary," as they were not provided any notice or given an opportunity to be heard before the order was issued.
High Court Grants Temporary Relief
After hearing the initial submissions, Justice S G Dige scheduled a detailed hearing for Tuesday, explicitly instructing the ACB to refrain from acting on the lower court's directive until then.Background of the Allegations
The controversy emerged from a complaint filed by Sapan Shrivastava, a media reporter, who alleged significant financial fraud, regulatory violations, and corruption in the listing process of a company on the Bombay Stock Exchange in 1994. Shrivastava’s complaint suggested the fraudulent listing was facilitated by the collusion of regulatory authorities, particularly SEBI, which allegedly ignored necessary compliance measures under the SEBI Act, 1992, and its regulations.Special ACB Court’s Observations
Special ACB Court Judge S E Bangar, who initially issued the directive, noted the existence of prima facie evidence suggesting regulatory lapses and possible collusion. The judge ordered an impartial investigation monitored by the court, demanding a status update within 30 days.SEBI and BSE Respond to Allegations
Responding to the accusations, SEBI emphasized in a statement on Sunday that it would take appropriate legal measures to challenge the special court’s order. The regulator underscored its commitment to maintaining compliance and clarified that the accused officials did not hold their respective positions during the period in question.Similarly, the Bombay Stock Exchange dismissed the allegations in a statement, labeling the application by Shrivastava as "frivolous and vexatious."
