2025 (11) TMI 1723

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....ficer The appellants in these two appeals are common as also the subject matter. Hence, we have heard these two appeals simultaneously and disposing them by this common order. 2. Appeal No. 750 of 2022 is directed against order dated 26.10.2021 passed by the WTM Whole Time Member, SEBI Securities and Exchange Board of India restraining the appellants (Noticee Nos. 2 and 4) from accessing the securities market for a period of three years and restraining them from holding the position of a Director or KMP Key Managerial Person in any listed Company for a period of three years. 3. Appeal No. 535 of 2022 is directed against order dated 27.05.2022 passed by the AO Adjudicating Officer, SEBI imposing a penalty of Rs. 20 Lakhs on appellan....

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....g inter alia that the documents such as pledge agreement and certified true copy of the board resolution dated 27.11.2009 were not signed by them; that the SCN did not demonstrate any personal gain made by the appellants from dealing in the GDRs; and that they were not aware of execution of pledge agreement and creation of charge over the proceeds of the GDRs. 9. After adjudication, the AO has imposed a penalty of Rs. 20 Lakhs and Rs. 10 Lakhs against the appellants No. 1 and 2 respectively. 10. Shri J. M. Bhalgat, Advocate for the appellant submitted that: • Appellants are innocent and are not aware of any transaction whatsoever; • SEBI has collected the documents from EURAM Bank and not from the appellants.....

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....re, Rainbow Papers Ltd. had issued 1.02 million GDRs amounting to USD 27.02 million and the entire issue was subscribed by only one entity, Vintage FZE. Rainbow Papers had issued the GDRs on 27.01.2010. In the normal circumstances, the Company issuing the GDRs receives the entire money immediately. Hence, Rainbow Papers ought to have received the entire subscription amount. Appellant has produced the loan Agreement No. K110110-011 dated 11.04.2010 between EURAM Bank and Vintage. The nature and purpose of facility is mentioned in the said loan agreement as follows: "Nature and Purpose of Facility To provide funding enabling Vintage FZE to take down GDR issue of 10,235,455 Luxemburg public offering and may only be transferre....

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....t discharged its burden of proving the pledge agreement. 18. In this case, the only point that arises for our consideration is whether appellants were involved in the GDR scheme? 19. Appellants admit that they have issued GDRs and it was entirely subscribed by Vintage. Their only grievance is that they have not executed the pledge agreement. 20. The loan agreement shows that EURAM Bank had agreed to fund Vintage to subscribe for 1.02 million GDRs issued by Rainbow Papers Ltd. On 13.07.2010, Arun Panchariya has acknowledged a letter written by EURAM Bank stating that the Bank had agreed to extend the outstanding loan amount under loan agreement dated 11.01.2010 till 27.01.2011 (page No. 102 of paper book). Similarly, there are other....