Congress On Court Action Against Ex-SEBI Chief Madhabi Buch: “Not A One-Off Scam, But Institutional Capture”
The Congress has sharply criticised the Modi government following a special court’s directive to file a case against former SEBI chairperson Madhabi Puri Buch and five other officials over alleged stock market fraud and regulatory violations. The party alleged that the case was not an isolated instance of malpractice but a broader symptom of “institutional capture” by corporate interests under the government’s watch.
Alappuzha Congress MP and party general secretary KC Venugopal launched a scathing attack, saying, “Ex-SEBI Chief, under PM Modi’s protection, has destroyed the credibility and sanctity of our capital markets regulator.” He asserted that the case demonstrated the need for a thorough examination of Buch’s tenure to restore investor confidence in the securities market.
The special Anti-Corruption Bureau (ACB) court in Mumbai ordered the registration of an FIR against Buch and other officials in response to a petition filed by journalist Sapan Shrivastava. Special Judge Shashikant Eknathrao Bangar observed that there was prima facie evidence of regulatory lapses and collusion, warranting an impartial probe. The court has also decided to monitor the investigation and sought a status report within 30 days.
Venugopal linked the allegations to the Adani controversy, saying, “Over and above the Adani Mega Scandal, this fresh judicial action on irregularities concerning IPOs shows that the decisions taken during her tenure must be thoroughly scrutinised.” He further questioned the government’s inaction, stating, “The Modi government must answer why SEBI has turned into a shield for corporate wrongdoing instead of safeguarding investors.”
The case pertains to allegations of financial fraud, regulatory violations, and corruption linked to the listing of a company that allegedly failed to meet the prescribed norms. The complaint claimed that SEBI officials not only failed in their statutory duties but also facilitated market manipulation and corporate fraud. The court noted that the absence of action by SEBI and law enforcement agencies necessitated judicial intervention.
SEBI, however, dismissed the court’s order as baseless, arguing that the officials named were not in their respective positions at the time of the alleged violations. It also accused the petitioner of being a habitual litigant, stating, “The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the court.” SEBI has announced its intention to challenge the order.
The three-year tenure of Buch, the first woman to lead SEBI, ended on March 1. While her tenure was marked by key reforms in market settlement speeds, FPI disclosures, and mutual fund expansion, it also witnessed controversy. The case ordered against her includes BSE Managing Director and CEO Sundararaman Ramamurthy, former BSE chairman Pramod Agarwal, and SEBI’s whole-time members Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney.
Venugopal also raised concerns about possible insider trading and wider implications for market integrity, saying, “Her involvement with various companies also raises serious questions about insider trading and her role in compromising the integrity of the stock market operations as a whole.”
Demanding a wider probe, he added, “This shows that her involvement is not restricted to a one-off scam; it exposes institutional capture by crony capitalist interests. We demand an independent probe and strict action against all guilty, including those in power who enabled this loot. The truth must come out!”
