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SEBI, BSE respond to allegations against Madhabi Buch, 5 others: Will take ‘appropriate legal steps’
Responding to the order, the SEBI has said in a statement that it “would be initiating appropriate legal steps to challenge this order”.
The Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange have responded to an order by a special Mumbai court against the former’s ex chairperson and five others saying that they will challenge the order with “appropriate legal steps”.
The response comes after an anti-corruption court in Mumbai ordered a probe against ex SEBI chairperson Madhabi Buch and five others on Saturday over allegations relating to financial fraud, regulatory violations and corruption. The court’s order came a day after Madhabi Buch completed her tenure as SEBI chairperson.
Apart from Buch, five others named in the order are three SEBI whole-time members - Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney and BSE chairperson Pramod Agarwal and CEO Sundararaman Ramamurthy.
What’s the case
A Thane-based journalist, Sapan Shrivastava, had filed a complaint against senior officials of the SEBI and BSE, alleging that the market regulator permitted the listing of a company on the BSE even though it was not in compliance with the SEBI Act, 1992. The complainant alleged that the company was listed fraudulently in 1994, with the active connivance of regulatory authorities, particularly SEBI.
The complainant added that the SEBI officials had failed in their statutory duties and the listing facilitated market manipulation and enabled corporate fraud. He also said that before approaching the court, he had approached the police and regulatory authorities to raise the concern but to no avail.
After looking at the material on record, the court asked the Anti-Corruption Bureau (ACB) to file an FIR under relevant provisions of the Indian Penal Code, Prevention of Corruption Act, SEBI Act and other applicable laws. The judge also asked for a status report within 30 days.
How SEBI, Bombay Stock Exchange reacted
Responding to the order, the SEBI has said in a statement that it "would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters."
"Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record," SEBI added.
SEBI also called the complainant a “frivolous and habitual litigant” saying that his previous applications had been dismissed by the court.
In line with the SEBI’s statement, the BSE also said that the alleged officials did not hold their respective positions at the time of the alleged listing of the company and were not connected with the company at all, reported news agency PTI. BSE said that it is initiating “necessary and appropriate legal steps in this regard” and called the application “frivolous and vexatious in nature.”
