"SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters," the regulatory board stated in a press release on Sunday
SEBI, in its response, defended the accused, highlighting procedural lapses in the court’s decision. Representational pic
The Securities and Exchange Board of India (SEBI) announced on Sunday that it would take legal steps to challenge a Mumbai court order directing the registration of a First Information Report (FIR) against its former Chairperson Madhabi Puri Buch, three serving whole-time members, and two officials from the Bombay Stock Exchange (BSE), news agency ANI reported.
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A special court in Mumbai ordered the FIR in connection with alleged financial fraud, regulatory violations, and corruption.
"SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters," the regulatory board stated in a one-page press release issued on Sunday, ANI reported.
The directive follows an application filed before the Special Anti-Corruption Bureau (ACB) Court in Mumbai by Sapan Shrivastava, a Thane-based legal news reporter. The complainant sought directions for the police to register an FIR and investigate alleged offences involving Buch and other officials.
Shrivastava has alleged large-scale financial fraud, regulatory lapses, and corruption, particularly in connection with the listing of Cals Refineries Ltd on the stock exchange, ANI reported. The complaint claims that the listing was facilitated through active collusion between regulatory authorities and market participants.
According to the complainant, SEBI officials failed in their statutory duty by enabling market manipulation and corporate fraud, allowing the listing of a company that did not meet regulatory requirements.
Stock market 'fraud' case: Special Court said allegations indicated a cognisable offence
SEBI, in its response, defended the accused, highlighting procedural lapses in the court’s decision.
"Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record," the regulator stated.
The case pertains to alleged fraudulent activities dating back to 1994.
"The application sought directions for the Police to register an FIR and investigate into the alleged irregularities in granting listing permission to a Company on the Bombay Stock Exchange in 1994, without complying with the provisions of the SEBI Act, 1992, SEBI (ICDR) Regulations, 2018, and the SEBI (LODR) Regulations, 2015," SEBI further stated.
The Special ACB Court, after reviewing the material on record, ruled that the allegations indicated a cognisable offence, necessitating an investigation. It directed the Anti-Corruption Bureau, Worli, Mumbai Region, to register an FIR under the relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, and other applicable laws.
The court will oversee the investigation into the alleged stock market fraud case and has instructed officials to submit a status report within 30 days.
SEBI also criticised the complainant, calling him a "frivolous and habitual" litigant, noting that his previous applications had been dismissed by the court, with some cases even resulting in the imposition of costs.
(With ANI inputs)
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