The Special Court under the Prevention of Corruption Act, 1988, has ordered the Anti-Corruption Bureau (ACB) to register an FIR and investigate allegations of large-scale financial fraud and regulatory misconduct involving top officials of the Securities and Exchange Board of India (SEBI) and executives of the Bombay Stock Exchange (BSE).
The accused include SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, Kamlesh Chandra Varshney, BSE Chairman Pramod Agarwal, and BSE MD & CEO Sundararaman Ramamurthy. The State of Maharashtra (through ACB) and the Union of India (through CBI) have also been named as respondents.
The case, filed by legal media reporter Sapan Shrivastava, alleges that SEBI officials colluded in the fraudulent listing of a company, bypassing essential compliance measures under the SEBI Act, 1992, and relevant regulations. The complaint, submitted under Section 156(3) of the Code of Criminal Procedure (Cr.P.C.), claims that SEBI officials allowed stock market manipulation, insider trading, and public deception, leading to significant financial losses for investors.
Key Allegations:
• SEBI permitted the listing of a company that failed to meet regulatory norms, including disclosure requirements and due diligence.
• Market manipulation through artificial inflation of stock prices and insider trading.
• Collusion by SEBI officials, constituting criminal misconduct under the Prevention of Corruption Act, 1988.
• Siphoning of public funds by company promoters after listing.
• Negligence by regulatory authorities and law enforcement despite multiple complaints.
The court, presided over by Special Judge Shashikant Eknathrao Bangar, observed that the allegations were serious and warranted immediate investigation. It referred to legal precedents, including Lalita Kumari v. Govt. of U.P. (2014) and CBI v. Ramesh Gelli (2016), to assert that registration of an FIR was mandatory in cases of cognizable offenses.
Court’s Directions:
1. The Anti-Corruption Bureau (ACB), Worli, Mumbai, must register an FIR and investigate under the IPC, Prevention of Corruption Act, and SEBI Act.
2. The investigation will be monitored by the court.
3. A status report is to be submitted within 30 days.
This case marks a significant development in India’s financial regulatory landscape, as it raises questions about transparency and accountability in market regulation. The outcome of this investigation could have far-reaching implications for investor confidence and corporate governance in the country.
