Court Directs FIR Registration Against Ex SEBI Chief, BSE Chairman

Judicial Intervention Orders Probe into Alleged Regulatory Violations and Corruption

Mumbai, March 1, 2025 – A special Prevention of Money Laundering Act court has asked the Anti-Corruption Bureau (ACB), Mumbai, to file an FIR against ex-SEBI chairperson Madhabi Puri Buch, BSE Chairman Pramod Agarwal, CEO Sundararaman Ramamurthy, and senior officials of the regulatory body. The direction has been issued based on charges of stock market fraud, regulatory abuse, and corruption.

Background of the Case

The order was passed by Special Judge S E Bangar on a complaint filed by Sapan Shrivastava, a Dombivli-based journalist, who had sought action under Section 156(3) of the Code of Criminal Procedure (CrPC). Shrivastava had complained that SEBI and BSE officials had conspired in the fraudulent listing of Cals Refineries Ltd, causing huge investor losses.

Allegations of Regulatory Failure

The plea alleged that SEBI officials enabled corporate fraud and market manipulation by allowing the illegal listing of the company. Shrivastava’s charges meant that regulatory agencies abdicated their responsibility of protecting investors, which led him to turn to the court after experiencing inaction from law enforcement and SEBI.

Court Observation

The charges point to a cognizable offence, which calls for an investigation. There is prima facie evidence of regulatory failures and suspected collusion, and therefore the necessity for a fair and transparent probe,” the court said, asking the ACB to carry out an investigation under the Prevention of Corruption Act, SEBI Act, Indian Penal Code, and other relevant laws.

Investigation Timeline

The court also directed the ACB to file a status report within 30 days, and the investigation is to be strictly monitored by the special court.

SEBI’s Response

In response to the order, SEBI denied the allegations, declaring that the officials mentioned in the complaint were not in the positions they held during the time of the alleged fraud. SEBI went on to label the complainant as a ”habitual litigant” with earlier applications rejected by the court. The regulatory agency reaffirmed its resolve to resist the court order and uphold due regulatory compliance.

Impact on Market Governance

The case throws critical issues about the regulatory surveillance and protection of investors in India’s capital markets into sharp focus, representing an important milestone in the ongoing examination of financial governance.