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The Securities and Exchange Board of India (SEBI) has announced its intention to pursue legal recourse against a directive issued by a Mumbai special court.
This directive mandates the registration of a First Information Report against former SEBI Chairperson Madhabi Puri Buch, 3 current Whole Time Members, and two officials from the Bombay Stock Exchange (BSE).
The court’s directive follows allegations of financial impropriety, regulatory infractions, and corruption. SEBI responded in an official statement, asserting, “SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters.”
The matter was brought before the court by Sapan Shrivastava, a Thane-based legal journalist, who petitioned the Special Anti-Corruption Bureau Court in Mumbai. His application sought judicial directives compelling law enforcement authorities to formally investigate the purported offenses, which he characterized as a large-scale financial fraud and regulatory dereliction.
More Into The Case
At the crux of the allegations is the disputed listing of Cals Refineries Ltd. on the stock exchange. It is asserted that this listing was facilitated through the complicity of regulatory bodies, thus enabling fraudulent market practices. The complainant contends that SEBI officials abdicated their statutory responsibilities by authorizing the listing of a corporation that failed to meet the prescribed regulatory benchmarks.
In its rebuttal, SEBI emphasized that the implicated officials were not incumbents at the time of the alleged infractions. “Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record,” the regulator stated.
The purported financial irregularities date back to 1994. SEBI clarified that the petitioner sought law enforcement intervention to scrutinize alleged procedural deviations in the approval of a company’s listing on the Bombay Stock Exchange during that year.
The complaint cites non-compliance with the SEBI Act, 1992, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Upon evaluating the submitted evidence, the court determined that the accusations met the threshold for a cognizable offense, thereby warranting a formal investigation.
Consequently, the Anti-Corruption Bureau (ACB) of Worli, Mumbai, has been instructed to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable statutes. The court has further mandated oversight of the investigative process and directed the submission of a status report within 30 days.
In a pointed critique, SEBI characterized the complainant as a “frivolous and habitual” litigant, highlighting that his prior legal petitions had been dismissed, in some instances accompanied by judicially imposed penalties.
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