Bombay HC Extends Stay On Order Directing FIR Against Ex-Sebi Chief Buch, 5 Others

The Bombay High Court on Tuesday extended the interim stay on a special court’s order directing the registration of an FIR against former SEBI Chairperson Madhabi Puri Buch and 5 other officials, in connection with an alleged stock market fraud and regulatory violations.

Interim Relief Continued

The court had initially granted the interim relief last month, citing that the special court’s order appeared to be passed mechanically without attributing any specific role to the accused. Justice Shivkumar Dige continued the stay, stating, “The interim relief granted earlier shall continue until further orders.”

The matter has been scheduled for further hearing on May 7, allowing the accused to review an affidavit filed by the original complainant in the case.

Case Details

The petitioners—including Madhabi Puri Buch, Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney (current SEBI whole-time directors), Sundararaman Ramamurthy (Managing Director & CEO of BSE), and Pramod Agarwal (former BSE chairman)—had challenged the special court’s order passed on March 1.

They sought to quash the order, arguing that it was “manifestly erroneous, patently illegal, and passed without jurisdiction.” The special court had directed the Anti-Corruption Bureau (ACB) to register an FIR over allegations related to the fraudulent listing of a company on the Bombay Stock Exchange in 1994.

Allegations & Complaints

The complaint was filed by Sapan Shrivastava, a media reporter, who alleged large-scale financial fraud, regulatory violations, and collusion involving SEBI officials. The special ACB court had observed prima facie evidence suggesting regulatory lapses, warranting an impartial probe.

However, the SEBI and the BSE countered the allegations, asserting that the accused officials were not in their respective positions at the time of the listing and had no connection with the company in question.

SEBI stated that the court had allowed the application without issuing notices or giving the regulatory body a chance to present facts. It labeled the complaint as “frivolous and vexatious.”

With the interim relief still in place, the legal battle over this case will continue to unfold. The Bombay High Court’s upcoming hearing in May is expected to address the merits of the petitioners’ claims and the legitimacy of the special court’s directive.

The case highlights the complexities involved in corporate governance, regulatory accountability, and the judiciary’s role in ensuring fair investigations without undermining the principles of due process.

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