Ex-SEBI Chief Madhabi Puri Buch faces FIR in a shocking stock market fraud case! Allegations of regulatory lapses and corporate fraud put her under legal scrutiny.
A special Anti-Corruption Bureau (ACB) court in Mumbai has directed the filing of a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) Chairperson, Madhabi Puri Buch, along with five senior officials from the Bombay Stock Exchange (BSE). This action stems from allegations of stock market fraud and regulatory violations.
Allegations and Court Proceedings:
The case was initiated by Thane-based journalist Sanap Srivastav, who accused SEBI and BSE officials of market manipulation and corruption. The complaint centers on the alleged fraudulent listing of a company on the stock exchange, purportedly facilitated by regulatory authorities without adherence to the necessary compliance requirements under the SEBI Act of 1992. The complainant asserts that SEBI officials neglected their statutory duties, enabling corporate fraud by permitting the listing of a company that failed to meet prescribed norms.
After reviewing the materials presented, Judge S.E. Bangar of the ACB court found prima facie evidence suggesting regulatory lapses and possible collusion. Consequently, the court ordered the ACB to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable laws. The ACB has been instructed to submit a status report within 30 days.
SEBI and BSE’s Response:
In reaction to the court’s directive, SEBI expressed its intent to challenge the order, stating that the decision was made without providing the regulator an opportunity to present its case. SEBI emphasized that none of its current officials were in office when the alleged misconduct occurred and highlighted the petitioner’s history of filing frivolous complaints. The regulator reaffirmed its commitment to ensuring regulatory compliance and indicated plans to initiate appropriate legal steps to contest the order.
Similarly, the BSE dismissed the allegations as frivolous and echoed SEBI’s stance on pursuing legal remedies. Both institutions underscored their dedication to maintaining market integrity and compliance with established norms.
Background on Madhabi Puri Buch(Ex SEBI Chief):
Madhabi Puri Buch made history as the first woman to lead SEBI, assuming the role of Chairperson on March 2, 2022. Her tenure concluded on February 28, 2025, succeeded by Tuhin Kanta Pandey. During her leadership, Buch implemented several reforms, including expediting equity settlements, enhancing disclosures for Foreign Portfolio Investors (FPIs), and promoting mutual fund penetration through initiatives like the ₹250 Systematic Investment Plan (SIP).
However, her tenure was not without controversy. In August of the previous year, U.S.-based short-seller Hindenburg Research accused her of a conflict of interest, alleging it impeded a thorough investigation into claims of manipulation and fraud within the Adani Group. These allegations led to political pressures and calls for her resignation. Additionally, internal challenges surfaced, with reports of employee protests against a purported “toxic work culture” within SEBI.
Implications for Regulatory Bodies:
The court’s order to investigate high-ranking officials from SEBI and BSE raises concerns about the efficacy of regulatory oversight in India’s financial markets. Such allegations, if substantiated, could undermine investor confidence and tarnish the credibility of these institutions. It underscores the necessity for transparent and robust mechanisms to prevent potential conflicts of interest and ensure adherence to regulatory standards.
Next Steps and Legal Proceedings:
With the FIR registered, the Anti-Corruption Bureau will commence its investigation into the allegations. The findings will be crucial in determining the veracity of the claims and any subsequent legal actions. As SEBI and BSE prepare to challenge the court’s order, the legal proceedings will likely attract significant attention from stakeholders within the financial sector.
Conclusion
The directive to file an FIR against former SEBI Chairperson Madhabi Puri Buch and senior BSE officials marks a pivotal moment in India’s financial regulatory landscape. The outcome of this investigation will have far-reaching implications for regulatory practices, market integrity, and investor trust. It highlights the critical importance of accountability and transparency within institutions entrusted with overseeing the nation’s financial markets.
Source: The Indian Express
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