Madhabi Puri Buch gets relief as Bombay High Court stays FIR in SEBI fraud case

The Bombay High Court on Tuesday stayed the order of a lower court which directed filing of an FIR against former market regulator chief Madhabi Puri Buch and five other officials for an alleged listing fraud that dates back to 1994.

A single judge bench led by Justice Shivkumar Dige stated that the special court's ruling from March 1 was issued “mechanically”, without thoroughly examining the details or assigning specific roles to the accused.

"After hearing all the counsels and persuing the impugned order... It appears that the special judge has passed the order mechanically without going into details and without giving opportunity to the respondents to file their say,” the judge said.

"Hence, the order is stayed till next date. Four weeks' time is given to the complainant in the case (Sapan Shrivastava) to file his affidavit in reply to the petitions," the Bombay High Court said.

The special court’s order was based on a complaint filed by Mumbai-based journalist Sapan Shrivastava, who alleged that SEBI (Securities and Exchange Board of India) officials had allowed the listing to proceed without adhering to the SEBI Act, 1992, as well as key regulatory frameworks such as the SEBI (ICDR) Regulations, 2018, and the SEBI (LODR) Regulations, 2015. The complainant further accused the officials of facilitating market manipulation, insider trading, and artificial inflation of share prices, leading to significant investor losses.

Last month, special judge Shashikant Eknathrao Bangar directed the Anti-Corruption Bureau (ACB) to register a First Information Report (FIR) against Buch, three current whole-time members of SEBI—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—and two senior BSE officials, Pramod Agarwal and Sundararaman Ramamurthy.

"There is, prima facie, evidence of regulatory lapses and collusion, requiring a fair and impartial probe," special court judge Shashikant Eknathrao Bangar had said.

Solicitor General Tushar Mehta is representing the SEBI officials accused in the case.