According to the complaint, the alleged fraud took place in 1994 when a company was listed on the BSE without following SEBI rules.
Mumbai: The Bombay High Court has extended the interim stay on a special court’s order directing an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations.
The High Court had earlier granted an interim stay on the special court’s order, noting that it was passed “mechanically” without assigning any specific role to the accused.
On Tuesday, Justice Shivkumar Dige observed that the original complainant had filed an affidavit. He allowed time for Buch and the others to review it.
The judge stated, “The interim relief granted earlier shall continue until further orders,”
Last month, Madhabi Puri Buch, along with SEBI whole-time directors Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, Bombay Stock Exchange (BSE) Managing Director and CEO Sundararaman Ramamurthy, and former BSE chairman Pramod Agarwal, filed petitions against the special court’s order.
They sought the quashing of the order, arguing it was “manifestly erroneous, patently illegal and passed without jurisdiction.”
The case is based on a complaint by journalist Sapan Shrivastava, who accused the officials of large-scale financial fraud, regulatory violations, and corruption. According to the complaint, the alleged fraud took place in 1994 when a company was listed on the BSE without following SEBI rules.
On March 1, Special ACB Court Judge S E Bangar ruled that there was “prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe.”
The court also stated that it would “monitor the probe and sought a status report within 30 days.”
SEBI clarified that the application filed by Shrivastava sought police directions to register an FIR and investigate alleged irregularities in granting listing permission to a company on BSE in 1994.
However, SEBI pointed out that “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.”
BSE also stated that the application called for an FIR against its officials regarding the listing of Cals Refineries Ltd in 1994.
It emphasized that “The officials named in the application were not in their respective positions at the time of listing and were not connected with the company at all.”
The stock exchange dismissed the allegations, calling them “frivolous and vexatious in nature.”
With the High Court extending the interim stay, the matter will be heard further on May 7.
