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Informist, Tuesday, Mar. 4, 2025

 

--HC stays order to register FIR against former SEBI chief Buch, others 

--CONTEXT: SEBI, BSE move HC against special court in Cals Refineries case 

 

NEW DELHI – The Bombay High Court on Tuesday stayed a special court order asking the Anti-Corruption Bureau to register a first information report against former Securities and Exchange Board of India chief Madhabi Puri Buch, whole-time members of the market regulator, and two BSE officials, on charges of alleged stock market fraud, regulatory violations, and corruption linked to the listing of a company in 1994.

 

The high court said that it appears that the special court judge had passed the order "mechanically", without going into details and without attributing any role to the petitioners. Staying the order, the high court sought the reply of complainant Sapan Shrivastava and listed the case for hearing after four weeks. 

 

The complaint in the case was filed by Sapan Shrivastava, 47, a journalist from Dombivali in Maharashtra's Thane district. In the complaint, Shrivastava had named Buch, SEBI's current whole-time members Ashwani Bhatia, Ananth Narayan G., and Kamlesh Chandra Varshney; and BSE officials Pramod Agarwal and Sundararaman Ramamurthy. 

 

Shrivastava's complaint relates to the alleged fraudulent listing of Cals Refineries Ltd. on stock exchange in 1994, which he said was with the active connivance of regulatory authorities, without compliance under the SEBI Act, 1992. Shrivastava had claimed that he and his family had invested in shares of Cals Refineries in 1994, which was listed on BSE, and had suffered huge losses. 

 

The complainant said SEBI officials had 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. The BSE suspended the company in 2019 due to penal reasons and surveillance measures, according to information on its website. Shares of Cals Refineries were last traded on BSE on May 6, 2019, when they closed at INR 0.10. Cals Refineries is not listed on the National Stock Exchange.

 

SEBI said the complainant who had moved the Anti-Corruption Bureau Court, seeking direction to the police to register a first information report and investigate alleged irregularities in the listing of the company, "is known to be a frivolous and habitual litigant, with previous applications being dismissed by the court, with imposition of costs in some cases". SEBI said the officials named in the application did not hold the respective positions at the relevant point of time. The market regulator said the court had allowed the application by the complainant without issuing any notice or granting any opportunity to SEBI to place the facts on record.

 

In the case of BSE, the complainant named former chairman and current Managing Director and Chief Executive Officer Sundararaman Ramamurthy. In its statement, BSE said these officials "were not in their respective positions at the time of listing and were not connected with the company at all".  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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