The Bombay High Court has temporarily halted the Anti-Corruption Bureau (ACB) from acting on a special court’s order to file a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five other officials. This directive will remain in effect until March 4, 2025, pending further hearings.
The special court’s order, issued on March 1, 2025, stemmed from allegations of stock market fraud and regulatory violations dating back to 1994. The complaint, filed by journalist Sapan Shrivastava, accused SEBI officials of facilitating the fraudulent listing of a company on the Bombay Stock Exchange (BSE) without adhering to prescribed norms, resulting in significant investor losses.
In response, Buch, along with BSE Managing Director Sundararaman Ramamurthy and four other officials, petitioned the Bombay High Court to quash the special court’s order, labeling it as illegal and arbitrary. Their legal representatives argued that the order was issued without notifying or hearing the accused parties, thereby violating principles of natural justice.
The High Court, presided over by Justice S G Dige, acknowledged the urgency of the matter and scheduled a hearing for March 4, 2025. Until then, the ACB has been instructed not to proceed with filing the FIR as directed by the special court.
SEBI has expressed its intention to challenge the special court’s order, asserting its commitment to regulatory compliance. The BSE has also criticized the order, deeming the application “frivolous and vexatious,” and emphasized that the officials named were not in their respective positions at the time of the alleged incident.
The case underscores the complexities involved in addressing historical allegations of financial misconduct and the legal challenges associated with ensuring due process for regulatory authorities.
