sebi
Published on 11 July 2025
Bombay HC to Hear SEBI and BSE Appeals on FIR Against Madhabi Puri Buch
Cals Refineries Listing Row Resurfaces: FIR Ordered Against SEBI, BSE Officials Amid Legacy Allegations
In a case that underscores the enduring complexity of regulatory accountability, a Mumbai special court has ordered the registration of an FIR against current and former officials of the Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE). The direction, issued in March 2025, stems from a long-running allegation: that Cals Refineries Ltd., a company now defunct, was fraudulently listed on the exchange in 1994 with the alleged connivance—or at least inaction—of capital market regulators.
The Core Allegation: Listing Without Regulatory Compliance
The complainant, whose identity remains confidential in public records, has alleged that Cals Refineries was allowed to list on BSE without fulfilling the requisite regulatory criteria, including disclosure obligations and listing due diligence. The charges invoke multiple regulations—the SEBI Act, 1992, Listing Obligations and Disclosure Requirements (LODR) Regulations, and the Issue of Capital and Disclosure Requirements (ICDR) Regulations—which the complainant claims were violated in both letter and spirit.
Notably, the complaint also points to post-listing fund siphoning by the company’s promoters, suggesting that SEBI failed to intervene even after warning signs emerged.
FIR Ordered: Officials Named Include Current SEBI Leadership
The special court, after reviewing the complaint, held that the allegations disclosed a cognizable offence and directed the Anti-Corruption Bureau (ACB) to register an FIR. Among those named are:
- Former SEBI Chairperson Madhabi Puri Buch
- Three current Whole-Time Members of SEBI
- Two senior officials of BSE
The court order invokes provisions under the Indian Penal Code, the Prevention of Corruption Act, and the SEBI Act, citing possible regulatory collusion or dereliction of duty.
SEBI and BSE Push Back: “Frivolous and Misleading”
Both SEBI and the BSE have moved swiftly to challenge the court’s order, labelling the complaint as not only factually flawed but procedurally unfair.
SEBI’s Response:
- Timing Mismatch: The regulator pointed out that none of the officials named held any position in SEBI at the time of the 1994 listing.
- Lack of Hearing: SEBI claims it was not granted an opportunity to present its side before the order was passed.
- Pattern of Vexatious Litigation: The complainant has been described as a “habitual litigant” who has filed similar petitions in the past—most of which have been dismissed, often with penalties.
SEBI has filed a legal challenge and obtained a stay from the Bombay High Court, halting further action on the FIR pending a full hearing.
BSE’s Response:
Echoing SEBI’s objections, BSE stated that the officials named were not associated with the exchange at the time of the listing. The exchange also noted that it was not notified of the hearing and had no chance to respond before the order was issued. Legal proceedings have been initiated to set aside the directive.
Regulatory History: Cals Refineries Under SEBI’s Radar for Years
While the current allegations date back three decades, Cals Refineries is not a new name in SEBI’s enforcement records:
| Year | Development |
|---|---|
| 1994 | Company listed on BSE |
| 2014 | SEBI barred several directors for 10 years over GDR-related violations |
| 2017 | Trading suspended in Cals Refineries shares |
| 2021 | SEBI imposed a penalty of nearly ₹17 crore for GDR manipulation |
| March 2025 | Special court orders FIR against SEBI and BSE officials |
The company has since faced insolvency proceedings and is no longer active on any exchange.
Broader Implications: Accountability and the Limits of Retrospection
The case raises several pressing questions for the financial regulatory community:
- How far back can accountability reasonably extend, especially when the individuals named had no role during the period in question?
- Can regulators be retrospectively held liable for decisions taken decades earlier under a different framework?
- What procedural safeguards must courts adopt before initiating such high-stakes legal action?
Legal experts and former regulators caution that while institutional accountability is essential, it must be rooted in due process and evidence, especially when it comes to regulatory bodies whose decisions impact market stability.
Current Status: Interim Relief Granted
As of now, the Bombay High Court has stayed the FIR, giving SEBI and BSE breathing room to present their case. The matter remains sub judice, and further hearings are expected to test the legal soundness and evidentiary basis of the complainant’s claims.
Conclusion: A Test Case in Regulatory Legacy
The Cals Refineries episode is more than just a legal challenge—it’s a test of how India’s financial regulators reckon with legacy issues and defend their institutional credibility. While SEBI and BSE appear well-positioned to contest both the facts and the process, the case is a reminder of the reputational risks that surface even from events buried decades in the past