‘Investor protection cannot be sacrificed for technical flaws’, court comments in CFO Nitika Suryavanshi case

Delhi High Court has expressed concern over the flaws in SEBI’s disclosure rules in the CFO Neetika Suryavanshi case. The court said that it should be mandatory to disclose to investors the old criminal and professional cases of senior officials.

Questioning the transparency of senior corporate officers, the Delhi High Court has expressed serious concern over possible blind spots in SEBI’s disclosure rules. This comment has come in a matter related to the hearing of a case related to CFO Nitika Suryavanshi. A petition was filed here on his alleged non-disclosure of pending criminal cases and unusual fluctuations in the company’s shares. At present, Nitika Suryavanshi has been granted bail in criminal cases.

The court has ordered SEBI to consider trading patterns, role of CFO and stringent disclosure standards for senior executives. According to experts, this case could become not just a review of the rules but also a test of CFO Nitika Suryavanshi’s personal credibility and corporate governance standards in India.

what is the matter

In the order dated January 2, 2026, the court asked SEBI whether the existing rules give senior officials the freedom to hide their prior legal or professional history from investors. The court clearly said that this is considered against the basic spirit of investor protection.

According to the petition, during the tenure of CFO Nitika Suryavanshi between 2019 and 2025, the company’s shares were found to have increased from Rs 20 to Rs 375. Abnormal volatility was seen and fell to Rs 80-88 after reinvestment. Although the court did not make direct allegations of market manipulation, it described the pattern as worrying.

The court was told that a criminal case under IPC and professional complaints are pending in ICAI against CFO Nitika Suryavanshi. These were allegedly neither disclosed to investors at the time of appointment nor later.

Questions raised on rules

The High Court indicated that the obligation to disclose only the current tenure matters in the SEBI (LODR) Rules constituted a serious regulatory deficiency. The court said, ‘Investor protection cannot be sacrificed for technical flaws.’