A special court has ordered the Anti-Corruption Bureau (ACB) to file an FIR against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and five other officials over allegations of stock market fraud and regulatory violations.
In its ruling issued on Saturday, Special ACB Court Judge Shashikant Eknathrao Bangar stated that there is prima facie evidence suggesting regulatory lapses and collusion, warranting an impartial investigation. The court emphasized that it would oversee the probe and has directed authorities to submit a status report within 30 days.
Highlighting the seriousness of the allegations, the court noted that they disclose a cognizable offence, necessitating a formal investigation. It further pointed out that the inaction of law enforcement agencies and SEBI has made judicial intervention necessary under the Criminal Procedure Code (CrPC).
The case stems from a complaint filed by a media reporter, who alleged large-scale financial fraud, regulatory misconduct, and corruption. The accusations revolve around the fraudulent listing of a company on the stock exchange, allegedly facilitated by SEBI officials in violation of the SEBI Act, 1992, and its regulations.
According to the complainant, SEBI officials failed in their statutory duty, enabled corporate fraud, and allowed market manipulation by permitting the listing of a company that did not meet the prescribed norms. Despite multiple attempts to bring the issue to the attention of police and regulatory authorities, no action was taken, prompting the court’s directive for an FIR under relevant provisions of the IPC, Prevention of Corruption Act, SEBI Act, and other applicable laws.
Madhabi Puri Buch, India’s first female SEBI chief, completed her three-year tenure on Friday. Although she was credited with reforms such as faster equity settlements, enhanced FPI disclosures, and increased mutual fund penetration through the ₹250 SIP initiative, her final year in office was marred by controversy.
In August last year, Buch faced mounting pressure to step down after US-based short-seller Hindenburg Research accused her of a conflict of interest, which allegedly prevented a thorough probe into fraud and manipulation claims against the Adani Group.
Hindenburg alleged that Buch and her husband, Dhaval Buch, had investments in offshore entities linked to Vinod Adani, the elder brother of Adani Group founder Gautam Adani. The Buchs denied the allegations, asserting that their investments were made before she took charge at SEBI and that all required disclosures had been duly complied with.
The controversy also coincided with internal unrest at SEBI, where employees protested against what they described as a “toxic work culture.” Despite these challenges, Buch remained at the helm until the end of her tenure.
Meanwhile, in a recent development, Hindenburg Research has announced the closure of its business.