Mumbai, Feb 2: In a significant development, a special Anti-Corruption Bureau (ACB) court in Mumbai has directed the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials in connection with an alleged stock market fraud and regulatory violations.
The order, issued by Judge Shashikant Eknathrao Bangar, cited prima facie evidence of regulatory lapses and collusion, warranting a comprehensive and impartial investigation. The court has also announced its intent to monitor the probe closely and has sought a status report within 30 days.
The court observed that the allegations disclose a cognizable offence, making it imperative for law enforcement agencies to conduct a thorough inquiry. It further pointed out that the inaction of SEBI and other regulatory bodies necessitated judicial intervention under the Criminal Procedure Code (CrPC).
The complainant, reportedly a media journalist, had approached the court alleging widespread financial fraud, regulatory failures, and corruption in the stock market. The accusations revolve around the fraudulent listing of a company on the stock exchange—allegedly facilitated by SEBI officials—without adherence to the SEBI Act, 1992, and its corresponding rules and regulations.
According to the complaint, the regulatory body not only failed in its statutory duty but also actively enabled corporate fraud and market manipulation by allowing the listing of a company that did not meet the prescribed norms. The complainant also claimed that despite multiple representations to the police and regulatory agencies, no action was taken, prompting judicial intervention.
Following a review of the case materials, the court has directed the ACB, Worli (Mumbai Region) to register an FIR under relevant provisions of the IPC, the Prevention of Corruption Act, the SEBI Act, and other applicable laws.
Madhabi Puri Buch, India’s first woman SEBI chief, officially completed her three-year term on Friday. While her tenure was marked by several reforms, including faster settlement cycles in equities, enhanced FPI disclosures, and efforts to boost mutual fund penetration, it was also overshadowed by controversies and political scrutiny.
Last year, Buch faced allegations from Hindenburg Research—a US-based short-seller—which accused her of conflict of interest in handling fraud and market manipulation claims involving the Adani Group. Hindenburg alleged that both Madhabi Puri Buch and her husband, Dhaval Buch, had investments in offshore entities linked to Vinod Adani, the elder brother of Adani Group chairman Gautam Adani.
The accusations gained traction when the Congress party also raised concerns over SEBI’s reluctance to investigate corporate fraud tied to influential industrial houses. Amid mounting pressure, there were calls for Buch’s resignation, particularly after reports of internal dissent among SEBI employees over what was described as a “toxic work culture.”
Buch, however, denied all allegations, asserting that the investments in question were made before her appointment at SEBI and that she had fully complied with all disclosure norms.
The development comes against the backdrop of Hindenburg Research recently announcing its decision to shut down operations. The firm, which made headlines with its reports on alleged financial malpractices in major Indian and global corporations, had played a pivotal role in triggering regulatory scrutiny against SEBI and Adani Group.
With the court-ordered investigation now in motion, the case could have far-reaching implications for regulatory governance in India’s financial markets. Whether this probe will uncover deeper systemic failures or simply remain a high-profile legal battle remains to be seen.