Bombay HC extends stay on FIR order against ex-Sebi chief Buch, 5 others

The Bombay High Court (HC) on Tuesday extended the interim stay on a special court’s order that had directed the registration of a First Information Report (FIR) against former Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations.

The HC had initially granted the interim stay last month, observing that the special court’s order appeared to have been passed mechanically without assigning 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 examine it. “The interim relief granted earlier shall continue until further orders,” Justice Dige said, adjourning the matter to May 7 for further hearing.

In March, Buch, three current whole-time directors of Sebi Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney, BSE’s MD and CEO Sundararaman Ramamurthy and BSE’s former chairman and public interest director Pramod Agarwal moved the HC against the special court order. They had sought quashing of the special court’s order directing the Anti-Corruption Bureau (ACB) to register an FIR against them in connection with certain fraud allegations related to the 1994 listing of a company on the BSE.

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

ACB court’s order and allegations against Buch and others

Based on a complaint filed by journalist Sapan Shrivastava, a special ACB court in the order dated March 1 had observed that there was prima facie evidence of regulatory lapses necessitating an investigation.

The court stated it would monitor the progress of the probe and directed authorities to submit a status report within 30 days.

The charges relate to the fraudulent listing of Cals Refineries Ltd in 1994, allegedly involving regulatory authorities, particularly Sebi, without adhering to compliance requirements under the Sebi Act, 1992. The complainant claimed that Sebi officials neglected their statutory duty, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet regulatory norms.