Mumbai, 2 March— A Mumbai special court has directed the Anti-Corruption Bureau (ACB) to register an FIR against former SEBI Chairperson Madhabi Puri Buch and five other officials over alleged stock fraud and regulatory violations. The court said it would oversee the investigation and has sought a status report within 30 days.
The complaint, filed by a journalist, alleged large-scale financial fraud, regulatory lapses, and corruption. The accusations center around the fraudulent listing of a company on the stock exchange, allegedly facilitated by SEBI officials without compliance with the SEBI Act, 1992.
The court, citing prima facie evidence, said the allegations reveal a cognizable offense, warranting judicial intervention. It also noted that inaction by SEBI and law enforcement agencies had necessitated the legal directive.
The complainant claimed SEBI officials failed in their statutory duties by permitting a company’s listing despite its non-compliance with required norms, enabling market manipulation and corporate fraud.
Despite repeated appeals to the police and regulatory bodies, no action was taken, the complainant stated. Taking the evidence into account, the court directed ACB’s Worli, Mumbai Region, to proceed under relevant sections of the IPC, Prevention of Corruption Act, and SEBI Act.
Controversies During Buch’s Tenure
Buch, India’s first woman SEBI chief, completed her three-year term on Friday. While she implemented key reforms, including faster equity settlements and enhanced FPI disclosures, her tenure was marred by controversy, including allegations of conflict of interest and internal employee unrest over “toxic work culture.”
In August last year, US-based short-seller Hindenburg Research accused Buch of having a conflict of interest that hindered SEBI’s probe into fraud allegations against the Adani Group.
Hindenburg claimed Buch and her husband, Dhaval Buch, had investments in offshore entities linked to Adani’s financial structure.
Both Buch and the Adani Group denied the allegations, stating the investments were made before she took charge at SEBI and that all disclosure norms were met.
Despite the controversy, Buch remained in her position until the completion of her tenure.
The case adds another layer of scrutiny to SEBI’s role in financial oversight, with the court’s intervention reinforcing the demand for greater regulatory accountability.
