India market regulator to challenge Mumbai court order against senior officials

MUMBAI: India’s market regulator and the Bombay Stock Exchange will take appropriate legal action to challenge a Mumbai court order against their officials in relation to an alleged stock market fraud and regulatory violations, they said in separate statements on Sunday.

On Saturday, a special anti-corruption court in Mumbai ordered an investigation into senior officials of the Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange in response to a petition filed by a journalist.

The petition alleges the market regulator allowed a fraudulent company to list on the stock exchange without meeting prescribed norms and hurt investors.

“SEBI would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters,” the regulator said in a statement on Sunday.

The respondents in the petition filed in the court include former SEBI Chairperson Madhabi Puri Buch, other existing senior SEBI officials and senior BSE officials.

Buch could not immediately be reached for comment.

When asked for comment, the SEBI officials referred to the SEBI statement and did not comment further. The BSE officials could not immediately be reached for comment.

SEBI’s statement said the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record.

The BSE also said the court had gone ahead without giving any notice or giving the exchange an opportunity to set out the facts.

“The officials named in the application were not in their respective positions at the time of listing and were not connected with the company at all,” BSE said.

“The application is frivolous and vexatious in nature.”

The court directed the Anti-Corruption Bureau to submit a status report within 30 days.