FIR against ex-SEBI chief Madhabi Puri Buch over Stock Market Fraud | Indian Stock Market Fraud

Mumbai special anti-corruption court has ordered the filing of an FIR against former Sebbi chairperson Madhavi Puri Buch, along with top officials of the Bombay Stock Exchange and the markets regulator, in a serious case of alleged stock market fraud and regulatory violations. This decision came in response to a criminal petition filed against the officials regarding the listing of a stock. The court stated that it will monitor the probe and has requested a status report within 30 days. In response, Sebbi has announced that it will challenge the court order. The case revolves around allegations made by a journalist, the complainant, who claims that officials at Sebbi, including former chairperson Madhavi Puri Buch and others, were involved in large-scale financial fraud by allowing the listing of a firm on the stock exchange. The complainant alleges that the listing was facilitated despite the firm not meeting the norms required for an IPO. According to the allegations, this enabled market manipulation, leading to artificial inflation of stock prices and misleading investors about the firm's financial health. The complainant further stated that despite repeated attempts to bring the matter to the attention of the police and officials, no action was taken. The petitioner presented evidence, including written complaints and documents, highlighting procedural lapses in the IPO norms. The complainant also accused the officials of engaging in round-tripping, insider trading, and price manipulation, which misled investors into believing the company was financially stable when it was not. The special court, after reviewing the material on record, concluded that the allegations disclosed a cognizable offense, necessitating an investigation. The court order noted that there is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. It also emphasized that the inaction by law enforcement and Sebbi necessitated judicial intervention. In response to the court order, Sebbi stated that it will challenge the decision, claiming that the case dates back to 1994, a time when the officers named in the order were not associated with the markets regulator. Sebbi also described the petitioner as a habitual complainant, pointing out that courts had previously imposed costs on the complainant for frivolous litigation. In a statement, Sebbi said that the court allowed the application without issuing any notice or providing an opportunity for Sebbi to present the facts on record. The statement added that the applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the court, sometimes with the imposition of costs.