A special court in Mumbai has directed the Anti-Corruption Bureau (ACB) to register an FIR against former Sebi chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud and regulatory violations.
“There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” the special ACB court judge, Shashikant Eknathrao Bangar, said in the order.
The order came after Buch’s tenure as the regulator’s chief came to an end recently. She faced a slew of allegations of impropriety during the final few months of her term.
According to reports, the order was issued on the basis of a complaint of lapses in dealing with various irregularities of the stock market.
The allegations are related to the fraudulent listing of a company on the stock exchange with the active connivance of regulatory authorities, particularly the Sebi.
The complainant claimed that the Sebi officials failed in their statutory duty, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet the prescribed norms.
Buch, during her tenure, faced conflict of interest allegations by Hindenburg. The US-based short-seller accused Buch and her husband Dhaval Buch of investing in offshore entities that were allegedly part of a fund structure in which Vinod Adani – the elder brother of Adani group founder chairman Gautam Adani – also had investments.
India’s first woman Sebi chief Buch, who faced conflict of interest allegations by the US-based short-seller Hindenburg and also political heat thereafter, completed her three-year tenure on Friday.
Although Buch in her tenure made significant strides in areas like faster settlements in equities, enhanced FPI disclosures and increasing mutual fund penetration through Rs 250 SIP, the last year of her tenure saw heightened controversy, when she battled a series of allegations by Hindenburg and the Congress party, while simultaneously dealing with in-house employee protests against “toxic work culture”.
In August last year, Buch faced pressure to resign after the Hindenburg Research accused her of having conflict of interest that prevented a thorough examination of manipulation and fraud claims at the Adani Group.
Hindenburg accused Madhabi Puri Buch and her husband Dhaval Buch of investing in offshore entities that were allegedly part of a fund structure in which Vinod Adani – the elder brother of Adani group founder chairman Gautam Adani – also had investments.