SEBI has decided to challenge the court’s order to file an FIR against its former chief and officials. The board argues that the case is based on a weak petition and that the court did not hear its side. SEBI insists that the allegations are not strong enough for such action. It plans to contest the order legally.
Mumbai: A special court mandated that a case be filed against former SEBI (Securities and Exchange Board of India) chairperson Madhabi Puri Buch along with five other officials in relation to alleged stock market fraud and regulatory violations.
The court will supervise the investigation and has requested a status report within 30 days. SEBI has stated “its intention to contest this order, arguing that the court acted on a frivolous petition without allowing the board to present its defense.”
In response to the petition filed by reporter Sapan Shrivastava, who called for an investigation. Special court judge Shashikant Eknathrao Bangar remarked,
“There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,”
The judges stated that “the allegations indicate a cognizable offense, necessitating an investigation, and highlighted that the inaction by law enforcement agencies and SEBI necessitates judicial intervention.”
SEBI announced, “It would initiate appropriate legal steps to challenge this order.”
The organization contended that the officials named were not in their respective roles at the time of the alleged incidents and criticized the court for allowing the application without issuing any notice or giving SEBI a chance to present facts.
SEBI added,
“The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the Court, with imposition of costs in some cases,”
Madhabi Puri Buch, who became the first woman to lead the markets regulator, completed her three-year tenure on March 1.
During her time, she made notable advancements in areas such as quicker settlements in equities, improved disclosures for foreign portfolio investors, and increased mutual fund participation through a Rs 250 SIP initiative. However, her last year in office was marked by controversy.
The officials against whom the court has ordered the filing of First Information Reports include BSE Managing Director and CEO Sundararaman Ramamurthy, former chairman and public interest director Pramod Agarwal, and SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney.
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