The Bombay High Court (Bom HC) has stayed the order of the Anti-Corruption Bureau (ACB) Court, which had directed the registration of an FIR against SEBI Chairperson Madhabi Puri Buch, Whole Time Member (WTM) Ashwani Bhatia, and BSE Chairman Pramod Agarwal in connection with a fraudulent listing case.
Key Observations by the Bombay High Court
- The ACB Court’s order was passed “mechanically” without proper consideration of details.
- The ACB Court failed to attribute specific roles to Buch, Bhatia, or Agarwal.
- The court has stayed the FIR directive and will resume hearing in four weeks.
Background of the Case
The ACB Court’s directive was based on a complaint filed by Sapan Shrivastava, a Thane-based journalist, alleging SEBI’s role in a fraudulent listing on the BSE in 1994. The complaint accused SEBI officials of failing to enforce regulatory conditions under the SEBI Act, 1992, thereby facilitating market manipulation and corporate fraud.
According to the complaint, the company in question, Cals Refineries, allegedly manipulated share prices through regulatory lapses and non-compliance in its IPO process. Trading in Cals Refineries’ shares was suspended in August 2017.
ACB Court’s Initial Order
- On March 1, 2025, Special Judge Shashikant Eknathrao Bangar ruled that the allegations warranted an investigation.
- He directed the ACB to file an FIR against six officials under various sections of the IPC, Prevention of Corruption Act, and SEBI Act.
- The court also mandated the submission of a status report within 30 days.
Relief for Buch and SEBI Officials
- The Bombay High Court intervened, staying the FIR directive and questioning the validity of the ACB Court’s order.
- The court highlighted the lack of direct involvement of Buch, Bhatia, and Agarwal in the alleged 1994 fraudulent listing, noting that Buch was not associated with SEBI at the time.
- The matter will now be heard again in four weeks.
Past Allegations Against Madhabi Puri Buch
This is not the first time SEBI Chairperson Madhabi Puri Buch has faced scrutiny. Last year, US-based short-seller Hindenburg Research accused her of conflict of interest over alleged undisclosed offshore investments linked to the Adani Group. Buch, however, denied the allegations, clarifying that the investments were made before her appointment as SEBI chief, and she had disclosed them as per regulations.
With the Bombay High Court stepping in, Buch and SEBI officials have received temporary relief, but the case remains under legal review.
