A special Anti-Corruption court in Mumbai on Saturday ordered the registration of an FIR against high-ranking officials of the Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE) in connection with allegations of stock market fraud and regulatory lapses.
Special Judge SE Bangar, reviewing a petition filed by Thane-based journalist Sapan Shrivastava, directed the Anti-Corruption Bureau (ACB) of Mumbai to register an FIR under the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act. The complaint accuses former SEBI Chairperson Madhabi Puri Buch, along with Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, as well as BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy, of facilitating market manipulation and corporate fraud by allowing the listing of a company that did not meet regulatory norms.
The petition alleges that these officials failed in their statutory duty, enabling insider trading, collusion with corporate entities, and the siphoning of public funds, which ultimately led to significant investor losses. None of the respondents were present in court during the proceedings, while Additional Public Prosecutors Prabhakar Tarange and Rajlaxmi Bhandari represented the Government of Maharashtra.
Judge Bangar noted that the complaint, supported by relevant documents, provided prima facie evidence of wrongdoing. “The allegations disclose a cognizable offense, necessitating a fair and impartial probe,” the judge stated, adding that the inaction by law enforcement and SEBI itself required judicial intervention. The court further directed the ACB to submit a status report on the investigation within 30 days.
This directive marks a significant step in addressing allegations of regulatory failure and market misconduct, as the investigation now moves forward under the scrutiny of judicial oversight.