The Bombay High Court on Tuesday extended till May 7, the interim stay on the order passed by a special court directing FIR against former SEBI chairperson Madhabi Puri Buch and five other officials for alleged stock market fraud and regulatory violations.
The HC, on March 3, had granted interim protection from coercive steps to Buch and others noting that the special court had passed the order mechanically and no specific role was attributed to the accused.
On Tuesday, Justice SG Dige noted that the original complainant in the case has filed an affidavit in the case and granted time to Buch and others to go through the same. “The interim relief granted earlier shall continue until further orders,” Justice Dige said while keeping the matter for hearing on May 7.
Buch, three current whole-time SEBI directors - Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney and two BSE officials - Managing Director and Chief Executive Officer Ramamurthy and its former chairman and public interest director Pramod Agarwal had approached the HC in March against the special court order.
The petitioners sought to quash the special court’s order, calling it illegal and arbitrary. They argued that the order was legally unsustainable, as they were neither issued a notice nor given a hearing before the decision was made. The petitions claimed that the special court order was “manifestly erroneous, patently illegal and passed without jurisdiction.”
On March 1, Special Judge Shashikant Eknathrao Bangar directed the ACB to register an FIR based on a complaint by Sapan Shrivastava, a journalist from Dombivli, who alleged irregularities in granting listing approval in 1994 without compliance with the SEBI Act, 1992, the SEBI (ICDR) Regulations, 2018, and the SEBI (LODR) Regulations, 2015.
The complaint alleged that SEBI officials, including Buch and several Whole-Time Members, failed to exercise regulatory oversight, allowing the company to list despite non-compliance with necessary norms. It further accused them of market manipulation, insider trading, and artificially inflating share prices, thereby defrauding investors and violating the Prevention of Corruption Act.
Shrivastava also claimed that multiple complaints to SEBI and law enforcement agencies were ignored.
