The Bombay High Court on Tuesday extended the interim stay on a special court’s order directing the filing of an FIR against former SEBI Chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud and regulatory violations.
Last month, the High Court had granted the interim stay, observing that the special court’s order appeared to be passed mechanically without attributing any specific role to the accused.
On Tuesday, Justice Shivkumar Dige noted that the original complainant had filed an affidavit in the case and granted time to Buch and the other accused to review its contents, according to a PTI report.
“The interim relief granted earlier shall continue until further orders,” Justice Dige said, posting the matter for further hearing on May 7, as per the report.
Petition Filed Last Month
Last month, former SEBI Chairperson, along with three current whole-time directors of SEBI—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—filed a petition in the Bombay High Court challenging a special court’s order. They were joined by Bombay Stock Exchange (BSE) Managing Director and CEO Sundararaman Ramamurthy and former BSE Chairman and Public Interest Director Pramod Agarwal.
The petition sought to quash the special court’s order, which directed the Anti-Corruption Bureau (ACB) to register an FIR against them in connection with alleged fraud related to the listing of a company on the BSE in 1994. The petitioners argued that the order was “manifestly erroneous, patently illegal and passed without jurisdiction.”
The special court’s order stemmed from a complaint by media reporter Sapan Shrivastava, who alleged large-scale financial fraud, regulatory violations, and corruption. In its March 1 ruling, Special ACB Court Judge S.E. Bangar noted the presence of prima facie evidence of regulatory lapses and collusion, warranting a fair and impartial investigation. The court also directed the ACB to monitor the probe and submit a status report within 30 days.
Shrivastava’s complaint alleged that the company’s fraudulent listing on the stock exchange in 1994 occurred with the active involvement of regulatory authorities, including SEBI, without compliance with the SEBI Act, 1992, and its associated rules and regulations.
SEBI, in its response, criticised the court’s decision, stating that the order was passed without issuing notice or allowing SEBI to present its facts. The regulator emphasised that the officials named in the complaint were not in their positions at the time of the listing and had no connection to the company involved.
The BSE also described the application as “frivolous and vexatious,” asserting that the officials named were not involved in the listing process of Cals Refineries Ltd at the BSE in 1994. The Bombay High Court has now extended the interim stay on the FIR, giving the petitioners more time to review the affidavit filed by the original complainant.
