Mumbai Court Orders FIR Against Former SEBI Chief Madhabi Puri Buch, Five Others Over Stock Market Fraud Allegations
Mumbai, 2nd March 2025: A special Anti-Corruption Bureau (ACB) court in Mumbai has ordered the registration of a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and five others over alleged stock market fraud and regulatory violations.
Special ACB Judge Shashikant Eknathrao Bangar ruled that there was prima facie evidence of lapses and collusion in regulatory rules, warranting a fair and impartial investigation. The court also stated that it would monitor the investigation and directed authorities to submit a status report within 30 days.
In a press release, SEBI stated that it intends to pursue appropriate legal measures to challenge the order, affirming its commitment to regulatory compliance. However, SEBI deleted the press release later on.
Court Finds Cognizable Offence, Calls for Judicial Intervention
The court’s order noted that the allegations in the case indicate a cognizable offence, necessitating an inquiry. It further stated, “The inaction of law enforcement agencies and SEBI requires judicial intervention under the provisions of the Code of Criminal Procedure (CrPC).”
The case was filed by a media reporter, who alleged large-scale financial fraud, regulatory violations, and corruption involving SEBI and other regulatory agencies.
Allegations Against SEBI and Regulatory Officials
According to the complainant, a company was listed on the stock exchange despite failing to meet the criteria outlined in the SEBI Act of 1992 and its associated rules and regulations. The complaint alleged active connivance of SEBI officials in facilitating this listing, thereby encouraging market manipulation.
The complainant further stated that multiple complaints were filed with the police and regulatory bodies, but no action was taken, prompting judicial intervention.
Court Directs ACP Worli to Register FIR
Based on the material presented, the court directed ACP Worli to register an FIR under relevant provisions of:
- Indian Penal Code (IPC)
- Prevention of Corruption Act
- SEBI Act
- Other applicable laws
Buch Faced Pressure After Hindenburg Accusations
Madhabi Puri Buch, India’s first woman SEBI chief, had been under political pressure following allegations made by US-based short-seller Hindenburg Research. She completed her three-year tenure on Friday and retired from her position.
In August last year, Hindenburg accused Buch of conflict of interest and alleged that she had attempted to block a thorough investigation into manipulation and fraud allegations against Adani Group.
Hindenburg further alleged that Buch and her husband Dhaval Buch had invested in offshore entities that were part of a fund structure linked to Vinod Adani, elder brother of Adani Group Chairman Gautam Adani.
Buch denied these allegations, stating that the investments were made before she joined SEBI and that she had adhered to all regulatory requirements.
Hindenburg’s Exit from Business
Notably, Hindenburg Research recently announced the closure of its business, marking the end of its short-selling operations that had targeted several major companies worldwide.
The court-monitored investigation is expected to reveal further details about the extent of regulatory lapses and possible collusion in stock market operations.
