Modi 3.0: Plea before SC over June 4 stock market crash, seeks report from Centre, SEBI

A plea was filed before the Supreme Court this week for inquiry into the June 4 stock market crash. The petition filed by advocate Vishal Tiwari called for the Centre and the Securities and Exchange Board of India to submit a detailed report on the matter. Investors had lost around ₹31 lakh crore on Tuesday as the stock market suffered its worst single-day fall in 4 years.

"It is said that after announcements of exit polls in respect to the Lok Sabha 2024 results, the share market went high, but when the actual results were announced the market crashed Stock market volatility again emerged. As per news reports, the loss was ₹20 lakh crore. This again has raised question mark on the regulatory mechanism... despite this court's direction, nothing has changed," the petition said.

Exit polls had predicted a landslide win for the BJP-led NDA with the BSE benchmark Sensex shooting up on Monday by 2,507 points or 3.4% to settle at a new closing peak of 76,469. The equity markets witnessed a bloodbath on Tuesday as the ruling coalition eked out a muted victory. The Sensex tanked 4,390 points or 6% to settle at 72,079 as the counting of votes continued. 

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The development came mere days after former IAS officer EAS Sarma — a Secretary in the Finance Ministry between 1999-2000 — demanded an Enforcement Directorate inquiry into the crash. He penned a letter to Economic Affairs Secretary Ajay Seth asking if Sebi had taken any action to calm the market or initiated an investigation. 

“It is disturbing that a combination of factors triggered a stock market surge on June 3, 2024, followed by a huge crash during the day that followed, wiping out the hard-earned savings invested in the market by small and marginal investors, allowing the bigger stockmarket sharks to profiteer at their cost. Even today, the stock market has not fully recovered,” he wrote.

(With inputs from agencies)