2025 (11) TMI 870

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....stice P. S. Dinesh Kumar, Presiding Officer This appeal by Shri Arun Panchariya (noticee No. 2) is directed against order dated December 15, 2021 passed by the WTM Whole Time Member, SEBI Securities and Exchange Board of India issuing various directions in paragraph No. 88 of the said order. 2. We have heard Shri Sandeep Wadhawan, learned Advocate for the appellant and Shri J.P. Sen, learned Senior Advocate for the respondent. 3. This is also one of the cases of Global Depository Receipts (GDRs) in which the appellant is involved. 4. Brief facts of the case are, the first noticee Company (Winsome Textile Industries Ltd.) had issued GDRs amounting to USD 9.99 million on March 31, 2011. Pan Asia Advisors Ltd. (noticee No. 11) was ....

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....able in law. 8. Shri Wadhawan further submitted that the order impugned in this appeal was challenged by the Company before this Tribunal in Appeal No. 348 of 2022 and connected appeals decided on 13.09.2023, wherein this Tribunal has held in paragraph No. 23 of that order that the Company had received the balance amount towards GDR proceeds and the same has been utilized for the purpose the issue was made. He submitted that this finding has remained unchallenged and attained finality. 9. Shri Wadhawan further submitted that SEBI has been imposing penalties without any rationale. He has produced a chart containing 23 cases in which the appellant is involved and pointed out that where the GDR amount is more than double the value, the p....

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.... cause notice is different and distinct from the first stage of the alleged fraud. We are of the opinion that the entities involved in the second stage of the alleged fraud have nothing to do with the alleged fraud involved in the first stage as there is no material to suggest any connection of noticee nos. 4, 14, 15 and 17 with noticee no. 1 and its directors and noticee no. 3. The first stage of the fraud is with regard to the issuance of the GDR issue in connivance with the Company Winsome and its directors with Arun Panchariya and Vintage. The second stage of the alleged fraud is the conversion of GDR into shares by noticee nos. 4, 14, 15 and 17 and selling it in the Indian market. We find that noticee nos. 4, 14, 15 and 17 has no conne....

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....ny penalty and imposed lesser penalty in some cases. He referred to the following cases in support of this contention. S. No Cause List Appeal No. Scrip Name GDR amount SEBI Order date (AO/WTM) Penalty Amount Debarment Period Date when debarment period will end Disgorgement amount Remarks 2 7 871 of 2023 Zenith Birla (India) Ltd. USD 22.99 Million 26.07.2023 (AO) 2000000 NIL NIL NIL Para 65, Appeal pg. 100 7 10 869 of 203 Rainbow Papers Ltd. USD 27.02 Million 26.07.2023 (AO) 20,00,000 NIL NIL NIL   9 11 872 of 2023 Edserve Softsystems Ltd USD 23.888 Million 2 6.07.2023 (AO) 20,00,000 NIL NIL NIL   ....