Madhabi Buch, 3 Sebi directors move Bombay HC to quash FIR in fraud case

Bombay HC will hear Sebi and BSE officials' plea on March 4 against an FIR order in the 1994 Cals Refineries stock fraud case, which was issued just two days after Buch's tenure ended

The Bombay High Court has agreed to hear a plea on March 4 from the Securities and Exchange Board of India (Sebi) and the Bombay Stock Exchange (BSE) against an FIR order in the 1994 Cals Refineries stock listing fraud case, according to media reports.

 

Former Sebi chairperson Madhabi Puri Buch, along with three whole-time directors—Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney—and two senior BSE officials, Pramod Agarwal and Sundararaman Ramamurthy, have approached the Bombay High Court seeking to quash a special Anti-Corruption Bureau (ACB) court’s order directing police to register an FIR against them over the alleged fraudulent stock listing.

 

According to Bar and Bench, the matter was mentioned before Justice S G Dige on Monday. Solicitor General Tushar Mehta appeared for Sebi officials, while senior advocate Amit Desai represented BSE officials.

Court order and allegations

The ACB court in Worli, Mumbai, issued the order just two days after Buch completed her tenure as Sebi chairperson. In a detailed order dated March 1, special ACB court judge Shashikant Eknathrao Bangar stated, “The allegations disclose a cognisable offence, necessitating an investigation. There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe. The inaction by law enforcement and Sebi necessitates judicial intervention under Section 156(3) CrPC.” 

The case and complaint

The complaint against the former Sebi chief, three whole-time directors, and BSE officials was filed by Sapan Shrivastava, a 47-year-old legal reporter from Dombivli in Maharashtra’s Thane district.

 

Shrivastava sought FIR registration and an investigation into alleged large-scale financial fraud, regulatory violations, and corruption.

 

The charges relate to the fraudulent listing of Cals Refineries Ltd in 1994, allegedly involving regulatory authorities, particularly Sebi, without adhering to compliance requirements under the Sebi Act, 1992. The complainant claimed that Sebi officials neglected their statutory duty, facilitated market manipulation, and enabled corporate fraud by allowing the listing of a company that did not meet regulatory norms.

Sebi calls allegations ‘frivolous’

Following the ACB court order, Sebi issued a statement in support of Buch, calling the complainant “a frivolous and habitual litigant” and alleging that his previous applications had been dismissed by the court, with costs imposed in some cases.

 

Sebi said it would initiate legal proceedings to challenge the order, asserting that it “remains committed to ensuring due regulatory compliance in all matters.”

Past allegations against Buch

In August 2024, Buch and her husband Dhavan Buch came under scrutiny after short-seller firm Hindenburg Research—now disbanded—claimed they had “undisclosed investments” in offshore entities linked to the Adani Group.

 

According to Hindenburg, the Buchs held stakes in Bermuda and Mauritius-based funds allegedly connected to Vinod Adani, the brother of Gautam Adani. The report also alleged that during her tenure as Sebi chairperson, Buch owned a Singaporean consulting firm, Agora Partners, which she later transferred to her husband. The firm reportedly did not publicly disclose its financials, raising questions about transparency in her financial dealings.

 

Both Buch and her husband denied the allegations, and no action was taken against them by Indian probe agencies.