Stock market fraud: SEBI reacted to the decision of the special ACB court, said – will take appropriate legal steps

New Delhi| The Securities and Exchange Board of India (SEBI) said it will take legal steps to challenge the special ACB court order. SEBI also said that it is committed to proper regulatory compliance in all cases. The court has directed Worli and Mumbai’s Anti-Corruption Bureau to investigate allegations of a company being fraudulently listed on the stock exchange and file FIRs under the Indian Penal Code, Prevention of Corruption Act, SEBI Act and other applicable laws. Special Judge S.E. Bangar gave this instruction on the petition filed by Thane journalist Sapan Srivastava. Former SEBI chief Madhabi Puri Buch and other senior SEBI officials are accused in this case.

Responding to the court order, SEBI said in a statement, an application was filed against the ACB court in Mumbai against the former SEBI chief, three sitting full-time members and two BSE officials. Although these officers were not in their posts at the relevant time, the court approved the application without issuing any notice or giving any opportunity to SEBI to place the facts on record. SEBI said the applicant is known to be a habitual litigant, whose previous applications were rejected by the court and in some cases even imposed fines.

What the petitioner had alleged
The petitioner had alleged that SEBI officials enabled stock market manipulation and corporate fraud by allowing listing of a company which did not meet the prescribed norms. The petitioner claims that SEBI’s failure led to financial fraud, insider trading and misappropriation of public funds. Furthermore, the Bombay Stock Exchange (BSE) has been accused.

The complaint names several high-profile people, including former SEBI chief Madhabi Puri Buch, full-time members Ashwini Bhatia, Anant Narayan and Kamlesh Chandra Varshney. Apart from this, BSE chief Pramod Aggarwal and Chief Executive Officer Sundararaman Ramamurthy have also been included among the accused.

Who is Madhabi Puri Butch?
On 2 March 2022, Madhabi Puri Butch took over the responsibility of chairperson of SEBI and retired from the post on 28 February this year. Earlier, she was a full-time member of SEBI and looked after the functioning of the departments related to market regulation, investment management and IT. Madhabi Puri Butch has also worked as a consultant at New Development Bank in Shanghai and as Singapore Head at private equity firm Greater Pacific Capital. Madhabi Puri Buch has been the MD and CEO of ICICI Securities and has also held the post of Executive Director on the board of ICICI Bank. Butch holds an MBA from IIM Ahmedabad and a Mathematics degree from St. Stephen’s College, New Delhi.