Bombay High Court Grants Relief to Former SEBI Chief Madhabi Buch in Alleged Market Fraud Case. Explaining the case involves the Bombay High Court’s decision to provide relief to Madhabi Puri Buch, the former chairman of the Securities and Exchange Board of India (SEBI), in a case related to alleged market fraud. The court’s ruling is seen as a significant development in the legal proceedings, potentially impacting the outcome of the case and Buch’s standing in the financial regulatory sector. The details of the relief granted and the implications of the decision are crucial for understanding the broader context of the case and its relevance to financial market regulation in India. Additionally, the case highlights the complexities of legal disputes involving high-ranking officials in regulatory bodies and the importance of judicial scrutiny in ensuring fairness and accountability.

Mumbai:

The Bombay High Court on Tuesday stayed, for four weeks, a lower court order directing the filing of a police case against Madhabi Puri Buch, the former chief of market regulator SEBI, and five others in connection with alleged market fraud and regulatory violations.

A single bench of Justice Shivkumar Dige observed that the special court’s order of March 1 had been passed mechanically without delving into details or assigning specific roles to the accused.

“Hence, the order is stayed till the 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 court said.

The ruling came on pleas filed by Ms. Buch and three full-time directors of SEBI (Securities and Exchange Board of India) – Ashwani Bhatia, Ananth Narayan, and Kamlesh Chandra Varshney.

Bombay Stock Exchange (BSE) Managing Director and CEO Ramamurthy, along with the BSE’s former chairman and Public Interest Director Pramod Agarwal, had also filed pleas.

These petitions sought the quashing of the special court’s order directing the Anti-Corruption Bureau to file a police case regarding allegations of fraud dating back to 1994, during the listing of a company on the BSE.

The special court’s order followed a complaint by a reporter seeking investigation into the alleged offences, which reportedly involved financial fraud, regulatory violations, and corruption.

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

The court had noted that the allegations disclosed a cognisable offence, making an investigation necessary, and that the inaction by law enforcement agencies and SEBI “necessitates judicial intervention.”

On Monday, the High Court agreed to an urgent hearing of Ms. Buch’s plea along with those of the other four individuals. It also directed the ACB to refrain from taking any action until the hearing this morning.

READ | High Court Halts Fraud Case Against Ex-SEBI Chief Madhabi Buch

Solicitor-General Tushar Mehta, representing the SEBI directors, along with lawyers for Ms. Buch and the BSE officials, argued that the special court’s order was “manifestly erroneous, patently illegal, and passed without jurisdiction,” and that no case had been established.

SEBI, on Sunday, stated that it “would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters.”

READ | “Will Challenge”: SEBI As Court Orders FIR Against Ex-Chief, Officials

“The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the Court, with imposition of costs in some cases,” SEBI had said.

The BSE described the reporter’s claims as “frivolous and vexatious in nature.”

With input from agencies

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