A special court ordered that a case be filed against former SEBI (Securities and Exchange Board of India) chairperson Madhabi Puri Buch and five other officials in connection with alleged stock market fraud and regulatory violations. The court has said it will monitor the probe, and sought a status report (of the case) within 30 days. The SEBI has said it would contest the order, contending that the court was acting on a “frivolous” petition and had not given the board a chance to present its side.

“There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” special court judge Shashikant Eknathrao Bangar said in response to the petition filed by  a reporter, Sapan Shrivastava, who sought an investigation.

The allegations disclose a cognisable offence, making investigation necessary and the inaction by law enforcement agencies and SEBI “necessitates judicial intervention” the judges said.

The SEBI said it would be “initiating appropriate legal steps to challenge this order”. 

Arguing that the officials named were not holding their respective positions at the time concerned, SEBI said, “The court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record”. 

“The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the Court, with imposition of costs in some cases,” the SEBI said.

The three-year tenure of Ms Buch — the first woman to lead the markets regulator — ended on March 1.  During her tenure, Ms Buch 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 controversy.

Besides her, the officials against whom the court has ordered the registration of First Information Reports include BSE Managing Director and Chief Executive Officer Sundararaman Ramamurthy, its then chairman and public interest director Pramod Agarwal and SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney.

(With agencies)