A court in India’s finance hub Mumbai has ordered an investigation into allegations of stock market fraud by the former chief markets regulator, officials and local media said on Sunday.
The anti-corruption bureau was directed to begin a probe against former Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch and five other officials “in connection with alleged stock market fraud and regulatory violations”, the Press Trust of India (PTI) news agency reported.
The court said inaction by SEBI and other law enforcement agencies made it necessary for judicial intervention, the PTI report said.
In a statement, SEBI said the “miscellaneous application” before the court alleged irregularities over the listing of a company on the Bombay Stock Exchange, India’s main stock market.
SEBI said it “would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters.” It said Buch and the other officials were “not holding their respective positions at the relevant point of time” and that it was not given an opportunity to “place facts on record”.
It is not the first time Buch, who just finished her tenure as SEBI chief last week, has come under the lens.
Last year, US-based short-seller Hindenburg Research claimed past offshore investments by Buch may have prevented her from properly investigating corporate malfeasance allegations against Indian conglomerate Adani Group.
Hindenburg accused Buch and her husband of having held investments in offshore funds that a senior Adani family member also allegedly used. It suggested the regulator may have been “reluctant to follow a trail that may have led to its own chairperson”.
Buch rejected the allegations as “baseless”, but critics called for her resignation.
The opposition Congress party’s Rahul Gandhi had then said the securities regulator had been “gravely compromised” and called for her resignation, as well as a joint parliamentary investigation.
Adani Group, the sprawling ports-to-power Indian firm, saw billions of dollars wiped from its market value in 2023 after a bombshell Hindenburg report accused it of “brazen” corporate fraud.
