Bombay HC extends stay on order directing FIR against ex-Sebi chief Madhabi Buch & 5 others

Mumbai: The Bombay High Court on Tuesday extended the interim stay on a special court’s order directing FIR against ex-Sebi chairperson Madhabi Puri Buch and five other officials for alleged stock market fraud and regulatory violations.

The HC last month granted the interim stay on the special court’s order, noting it was passed mechanically and no specific role was attributed to the accused. On Tuesday, Justice Shivkumar Dige noted that the original complainant in the case has filed an affidavit and granted time to Buch and others to go through the same.

“The interim relief granted earlier shall continue until further orders,” Justice Dige said, posting the matter for further hearing on May 7.

Last month, Buch, three current whole-time directors of the Securities and Exchange Board of India (Sebi) Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney, Bombay Stock Exchange’s Managing Director and Chief Executive Officer Sundararaman Ramamurthy and BSE’s former chairman and public interest director Pramod Agarwal moved the HC against the special court order.

The pleas sought quashing of the order passed by the special court which directed the Anti-Corruption Bureau (ACB) to register an FIR against them pertaining to certain allegations of fraud committed in 1994 while listing a company on the BSE.

The petitions claimed the special court order was “manifestly erroneous, patently illegal and passed without jurisdiction”.

The order by the special court was passed on a complaint filed by Sapan Shrivastava, a media reporter, seeking investigation into the alleged offences committed by the accused, involving large scale financial fraud, regulatory violations and corruption.

Special ACB court judge S E Bangar, in his March 1 order, noted there was prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. The ACB court also said it will monitor the probe, and sought a status report within 30 days. The allegations in the complaint pertained to “fraudulent listing of a company on the stock exchange in 1994 with the active connivance of regulatory authorities”, particularly the Sebi, without compliance under the SEBI Act, 1992 and rules & regulations thereunder.