Bombay High Court has accepted to hear with urgency an appeal filed by the senior-most officers of SEBI and the BSE seeking quashing of an FIR against them for fraudulent share market transactions.
The case is based on a complaint made by journalist Sapan Shrivastava, who had alleged that SEBI chairperson Madhabi Puri Buch and other officials facilitated the fraudulent listing of a company, resulting in huge investor losses. The complaint alleged that SEBI and BSE officials did not take action against corporate fraud but facilitated it.
The Bombay High Court has agreed to hear on an urgent basis a plea submitted by senior members of SEBI and the BSE, who are looking to cancel an FIR lodged against them for fraudulent activities in the stock market.
Last Saturday, Special ACB Court Judge S.E. Bangar ruled that the allegations pointed to a “cognizable offense” and ordered the Anti-Corruption Bureau (ACB) to register an FIR. The judge also directed an investigation under Section 156(3) of the CrPC and instructed authorities to submit a probe report within 30 days.
In response, senior advocates Amit Desai and Pasbola, representing SEBI and BSE officials, argued that the complaint was misleading and based on false claims. Desai insisted that the regulations Shrivastava quoted came into force only in 2002, while the said company, Cals Refineries Ltd., had been listed as early as 1994. He also insisted that the allegations were unfounded and were an attack on the economy of India.
Solicitor General Tushar Mehta, who is appearing on behalf of SEBI chairperson Madhabi, requested the court to hear the case at the earliest. Justice Dighe concurred and fixed Tuesday for the hearing. Shrivastava’s grievance charges SEBI and BSE authorities with manipulating the market by permitting a fake listing and not protecting investors. He claims that he and his family members suffered massive losses after they had invested in Cals Refineries Ltd. With both sides gearing up to battle it out in court, the limelight is now on the forthcoming Bombay High Court hearing, which could have far-reaching implications for stock market regulation and investor protection in India.
Edited By Saumya Sharan
