In a dramatic development, a special Anti-Corruption Bureau (ACB) court in Mumbai has directed the police to register an FIR against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations. The order was issued by Special Judge S.E. Bangar in response to a petition filed by Thane-based journalist Sapan Shrivastava.
Who Is Madhabi Puri Buch?
Ex Securities and Exchange Board of India (SEBI) chief Madhabi Puri Buch is the first woman to head the regulatory body. She is also considered to be the first from the private sector and first with core, hands-on experience of the capital market.Energetic and always backed by facts, she quickly gained popularity in a short span of time.
She not only upheld transparency in the rule-making process but also took it a step further. By setting up Industry Standards Forums (ISF) on nearly every aspect of SEBI’s regulatory framework, she created a space where stakeholders could openly and confidently share their inputs. Understanding the growing significance of data, cybersecurity, and other emerging challenges, Buch also made sure that dedicated standing committees were in place to address these crucial areas.
Typically, SEBI organises farewell ceremonies for outgoing chairpersons, But Buch wasn’t given a proper farewell due to the allegations on her involvement in the fraud case. However, a Business Standard report stated that Buch was unwell with COVID-19, which prevented an in-person farewell. She reportedly bid farewell to SEBI virtually due to pandemic-related restrictions and a formal farewell will be held once she recovers.
Buch’s departure was marked by an unusual atmosphere. She did not visit the office on her final day, her exit was met with relief among SEBI employees due to longstanding dissatisfaction with her leadership, the report mentioned.
About The Market Manipulation Allegation
The complaint, filed by a media reporter, alleges a large-scale financial fraud, regulatory violations, and corruption in connection with the fraudulent listing of a company on the stock exchange. he petitioner claims that SEBI’s failure to exercise its statutory duty led to financial fraud, insider trading, and the siphoning of public funds after the listing. Additionally, the Bombay Stock Exchange (BSE) was also implicated in the allegations.
The complainant stated that, despite multiple appeals to law enforcement agencies and regulatory bodies, no actions was taken against Madhabi Puri Buch and others.
The court emphasised that the allegations disclose a cognizable offence, requiring a fair and impartial probe. According to the court, the allegations indicated by the complainant is a cognizable offence and requires investigation. Court also emphasized that the inaction of SEBI and other law enforcement agencies necessitated judicial intervention. Consequently, the Anti-Corruption Bureau (ACB), Mumbai, has been directed to register an FIR under relevant provisions of the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act.
Who All Are Named In The Complaint
Former SEBI Chairperson Madhabi Puri Buch, Whole Time Members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney. Additionally, BSE Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy were also listed as respondents in the petition. Notably, none of the accused were represented in the court proceedings.
What Led To Buch’s unpopularity Among Her Colleagues?
According to a Zee News report, one of the key reasons for employee resentment was Buch’s last-minute promotions of favored officials. In her final days, she promoted 15 General Managers (GMs) to the Chief General Manager (CGM) level and elevated her Executive Assistant, Murugan, to the same rank.
The regulations require promotions to be granted in a step-by-step manner across all levels. However, Buch allegedly prioritized senior officers, overlooking those at lower levels. This selective approach led to widespread dissatisfaction among SEBI employees.
Generally, the SEBI Chief can hold office for up to five years or until they turn 65, whichever comes first. The initial tenure is three years, with a possible extension of up to two years. At 60, Madhabi Puri Buch was eligible for an extension, but the government decided not to renew her term.
