Synopsis: The Bombay High Court has granted a four-week stay on a special court's directive to file a First Information Report (FIR) against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five other officials. The court observed that the special court's order was issued without detailing the specific roles of the accused. This development stems from allegations of financial fraud and regulatory lapses related to a company's listing in 1994.
In a significant judicial intervention, the Bombay High Court has granted temporary relief to former SEBI Chairperson Madhabi Puri Buch and five other officials by staying a special court's order that directed the filing of an FIR against them.
The allegations pertain to purported financial fraud and regulatory violations associated with the 1994 listing of a company on the Bombay Stock Exchange (BSE).
Justice Shivkumar Dige, presiding over the single-judge bench, noted that the special court's March 1 order appeared to have been issued mechanically, lacking detailed reasoning and without attributing specific roles to the accused individuals.
Consequently, the High Court stayed the order and granted the complainant, Sapan Shrivastava, a four-week period to file an affidavit in response to the petitions.
The officials implicated include three current SEBI whole-time directors—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—as well as two BSE officials: Managing Director and CEO Sundararaman Ramamurthy, and former chairman and public interest director Pramod Agarwal.
The special court's directive was based on a complaint filed by media reporter Sapan Shrivastava, alleging large-scale financial fraud, regulatory violations, and corruption dating back to the 1994 listing.
Both SEBI and BSE have dismissed the allegations as frivolous. SEBI characterized Shrivastava as a "frivolous and habitual litigant," noting that previous applications by him had been dismissed, sometimes with costs imposed.
The regulatory body expressed its intention to challenge the special court's order, emphasizing its commitment to ensuring due regulatory compliance.
Similarly, BSE highlighted that the officials named were not in their respective positions at the time of the alleged fraud.
The exchange criticized the special court for proceeding without issuing any notice or providing an opportunity for BSE to present facts, labelling the application as "frivolous and vexatious in nature."
The Bombay High Court's intervention came after SEBI and BSE officials filed petitions seeking to quash the special court's order.
Solicitor General Tushar Mehta represented the SEBI officials, while senior counsel Amit Desai appeared for the BSE officials.
The court has scheduled further hearings to examine the merits of the case.
Conclusion:
The Bombay High Court's decision to stay the FIR against former SEBI Chairperson Madhabi Puri Buch and other officials underscores the judiciary's role in ensuring due process and preventing potential misuse of legal provisions.
As the case progresses, the court's forthcoming deliberations will be pivotal in determining the validity of the allegations and the appropriate course of action.
Disclaimer: The information presented in this article is based on available reports as of March 4, 2025. Legal proceedings are ongoing, and subsequent developments may not be reflected in this summary. Readers are advised to consult official legal sources or news outlets for the most current information.
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