Mumbai HC gave relief to Madhabi Buch by deferring action on an FIR allowed by a special court in Mumbai. Initailly, the special court had directed the Anti-Corruption Bureau to register an FIR against Madhabi Buch, former SEBI Chairperson, and five other officials. The three SEBI whole-time members and Bombay Stock Exchange (BSE) Chairman Pramod Agarwal and CEO Sundararaman Ramamurthy are included in this FIR!
Bomaby HC deferred action until March 4 hearing, granting interim relief to Buch and 5 others in a 1994 stock fraud case. #SEBI/BSE termed the complaint "frivolous," filed by a journalist alleging listing lapses. #MadhabiPuriBuch #FIIs pic.twitter.com/3TEp5JxfpM
— TIES (@ties_news) March 3, 2025
The speacial court was acting on a complaint of alleged Stock Market Fraud and Regulatory Failures related to the listing of Cals Refineries Ltd in 1994!!
While legal proceedings must take their due course, the complainant is Sapan Shrivastava. Shrivastava is an RTI activist with a concerning pattern of questionable litigation. Sapan, who claims to be a journalist, has no publicly available byline or articles to his name. Moreover, he has a history of frivolous lawsuits. Hence, analysts wonder if this is another hit job on Indian Stock Market using Madhabi Buch and the courts!
Madhabi Buch FIR and The Court’s Directive
A Mumbai court ordered the filing of an FIR and the launch of an investigation into alleged regulatory lapses during the listing of Cals Refineries in 1994. The complaint was filed by journalist Sapan Srivastava, who claimed that SEBI failed to act against the company and the… pic.twitter.com/R8k2kHcgKz
— CNBC-TV18 (@CNBCTV18News) March 3, 2025
Sapan Shrivastava’s complaint accuses SEBI officials of failing to regulate financial markets effectively. Thereby, allegedly allowing fraudulent market practices to take place. Shrivastava claims that he and his family suffered losses after investing in shares of Cals Refineries Ltd. in December 1994. Shrivastava seems to regret investing in this company as the company’s improper listing on the BSE made him suffer losses.
And so he holds SEBI responsible for failing to act against financial irregularities, causing investor losses.
By why Madhabi Buch is dragged through this mess?
A magistrate in Mumbai directs ACB in Mumbai to register FIR against #MadhabiPuriBuch , former @sebi Chairperson and 5 others for alleged improper listing of a share in 1994. Cals Refinery was listed and in 2013 barred from markets. Unfortunately no action was taken against the…
— Amit Goel (@AmitGoelTweets) March 3, 2025
The special court reviewed the allegations to conclude that they were serious enough to warrant an investigation. Thus, it directed the ACB to register an FIR under relevant sections of the Prevention of Corruption Act, the SEBI Act, and revelant sections of the BNS. But the company was taken off listings even before she took officce. And Madhabi Buch and many others were not in the drivers seat during any of this! However, the sepcial court instructed that the investigation be monitored, with a status report to be submitted within 30 days.
At first glance, the legal order appears to be a necessary step to uphold financial integrity. However, the complainant’s track record of alleged extortion in the name of FIRs raises legitimate concerns. Why was Madhabi Buch and others dragged into this mess? Did they hold office during the time the company was listed? Or is this another Hit Job at Madaubi Buch? Hence, is this case truly about investor protection? Or does it serve another purpose altogether?
SEBI Responds: A Frivolous Accusation?
Headlines vs Facts
Headlines:
FIR against Madhabi Puri Buch.
Allegations of fraud
Court orders FIR against SEBI ChiefFact:
It is about regulatory lapses in the year 1994. She was teaching accounting in a college in England at that point of time. pic.twitter.com/tQLFA6qn7M— Ravi Handa (@ravihanda) March 2, 2025
SEBI has strongly refuted the allegations. It states that neither Madhabi Puri Buch nor the other named SEBI officials were in office at the time of the alleged fraudulent listing. The regulator pointed out that Cals Refineries Ltd was granted listing permission in 1994, long before Buch’s tenure. Additionally, the company was suspended from trading in August 2017 due to regulatory non-compliance.
Moreover, SEBI has labeled Shrivastava a “frivolous and habitual litigant,” highlighting that past legal actions initiated by him have been dismissed with penalties.
Some lefties are getting too excited with the court ordered FIR against Madhabi Buch and other officials.
See this clarification from SEBI. The matter pertains to year 1994. pic.twitter.com/FMaTaJSqgq
— Jitendra Jain (@JitendraJain_) March 3, 2025
SEBI has also signaled its intent to challenge the court order, reaffirming its commitment to regulatory compliance and due process. The regulator’s response raises an important counterpoint. How can an FIR be justified against officials who were not in their respective positions when the alleged wrongdoing occurred? More importantly, does this case set a dangerous precedent where legal processes can be weaponized to target market regulators, potentially creating unnecessary panic?
Sapan Shrivastava Has A History of Frivolous Litigation
JUST IN: Mumbai court orders FIR against former SEBI chief Buch, others in alleged financial fraud case 🚨
Now here's something interesting I found.
The complainant is a Thane-based "news reporter" or "journalist" called Sapan Shrivastava.
Naturally, I was intrigued and…
— Shivam Vahia (@ShivamVahia) March 2, 2025
The most striking element of this case is the identity of the complainant himself. Despite claiming to be a journalist, Sapan Shrivastava has no known body of work in journalism. His LinkedIn profile calls him an RTI activist who is associated with RTI News. Thus, Shrivastava has no credible articles, no published reports, and no evidence of professional association with any known media house. This should be considered a serious “red flag”.
Many wonder if Shrivastava is truly just an investigative journalist uncovering regulatory lapses or a paid whistleblower.
More concerning is Shrivastava’s past legal history. In 2019, he filed a PIL against the Council for the Indian School Certificate Examinations (CISCE), alleging that ICSE and ISC curricula were operating without approval from the Ministry of HRD. The Bombay High Court dismissed the PIL as frivolous. Thereafter, the court imposed a hefty ₹5 lakh fine on Shrivastava. Additionally, it directed that an FIR be registered against him for extortion.
The court found that Shrivastava had misused crowdfunding platforms to raise money for the litigation and had threatened ICSE-affiliated schools to disclose their approvals, indicating a pattern of legal exploitation.
This history suggests that Shrivastava is not an unbiased whistleblower. Instead, he may be someone who has used the legal system for questionable gains in the past. And now he targets the financial regulatory framework. The FIR is against the former SEBI chief who was not on duty when the irregularity occurred! Thus, his pattern of dubious claims cannot be ignored.
Market Implications: The Dangers of Manufactured Financial Panic
Legal cases involving top regulatory officials have far-reaching consequences. The Indian Stock Market is under a downward spiral. Thus, such news is likely to push the financial markets further away from stability reducing investor confidence. Even if the allegations turn out to be baseless, the mere filing of an FIR against a former SEBI chief could trigger unnecessary panic among investors.
Unfortunately, this is not the first time that legal action has been leveraged to cause temporary market instability.
This retired IAS officer is so well read that he doesn’t know that the FIR on SEBI is about the 1994 listing of a fraud company Cals Petrochemical and nothing to do with Hindenburg. The courts instructions to file FIR against outgoing #SEBI Chief is erroneous and it has nothing… https://t.co/FVpD2msC45
— saket साकेत ಸಾಕೇತ್ 🇮🇳 (@saket71) March 3, 2025
The Hindenburg Research Report against Adani Enterprises is a prime example of market manipulation. In 2024, their timing and execution of the report led to a sharp market downturn. They also went after Madhabi Buch and SEBI for giving Adani a clean chit! Thereby, causing a mass withdrawal of FIIs and DIIs, making billions to disappear from the market. Resulting in investor losses before any judicual or regulatory body could verify the claims.
Seemingly, a pattern emerges – strategic litigation or accusations are used as a tool to create doubt and disruption.
Such FIRs and allegations do not just target SEBI, but destroy the credibility of the Indian economy itself. Investors, both domestic and foreign, rely on regulatory agencies like SEBI to ensure market integrity. When these agencies are targeted by individuals with a history of legal manipulation, it raises concerns about the misuse of the legal system for financial or personal gain.
Madhabi Buch FIR – A Case That Demands Caution
No one is above the law! Moreover, regulatory bodies must be held accountable for any lapses. However, the credibility of the accuser matters immensely. In this case, the HC granted interim relief. However, the FIR and the complaint comes from an individual with a history of frivolous lawsuits and a documented case of alleged extortion.
The judiciary will determine the outcome of this Madhabi Buch FIR and case.
However, the broader concern remains – how easily can the legal system be used to create market instability? If an FIR against a former SEBI chief can be initiated during a time when she was appointed to the office, the allegations definitely seem frivolous! Since the litigant has a known dubious past, what does this mean for the future of financial regulation in India?
Market integrity relies on trust and this trust can be easily shaken with allegations.
When legal actions are driven by individuals with questionable motives, it does not seem motivated by genuine concerns for investor protection. The challenge now is to ensure that due process is followed without allowing it to be hijacked for ulterior motives. Hopefully, Stock Market investors shall not bleed further. May SEBI and the courts find the truth soon!