FIR Against Former SEBI Chairperson Madhabi Puri Buch In GDR Scam
Madhabi Puri Buch made history as the first woman to lead the Securities and Exchange Board of India (SEBI), serving as its chairperson from March 2022 to February 2025. Her tenure was marked by significant reforms aimed at enhancing transparency, investor protection, and technological integration in India’s financial markets. Key Achievements as SEBI Chairperson The Global Depository Receipts (GDR) Scam: An Overview The GDR scam involved several Indian companies that misused Global Depository Receipts—financial instruments used by companies to raise capital from international markets. These companies issued GDRs with the intent to manipulate stock prices and siphon funds. Typically, a single entity would subscribe to the entire GDR issuance using loans secured by the GDR proceeds themselves, creating a facade of legitimate capital inflow while the actual funds never entered India. For instance, in the case of Farmax India Limited, GDR proceeds amounting to $71.9 million were not repatriated to India, despite the absence of bona fide future forex requirements. SEBI’s Actions Against the GDR Scam SEBI undertook rigorous investigations into the GDR scam, leading to several enforcement actions: FIR Against Madhabi Puri Buch Towards the end of her tenure, an Anti-Corruption Bureau (ACB) court ordered the filing of a First Information Report (FIR) against Madhabi Puri Buch in relation to the GDR scam. The court’s directive was based on allegations of negligence and lapses in regulatory oversight during her term. Buch has denied any wrongdoing and has moved the Bombay High Court to quash the FIR, asserting that all regulatory actions during her tenure were in strict compliance with SEBI’s mandate. Conclusion Madhabi Puri Buch’s tenure as SEBI chairperson was characterized by progressive reforms that aimed to modernize India’s financial markets and protect investors. However, the challenges posed by financial malpractices like the GDR scam highlight the complexities regulators face in maintaining market integrity. The allegations against Buch underscore the need for continuous vigilance and robust oversight in the ever-evolving financial landscape.
