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2021 (7) TMI 1433 - AT - SEBIGDR issue to sole subscriber - misleading information was given to the shareholders and the investors that the GDRs were subscribed by many entities - loan obtained by Vintage through a pledge agreement given by the Company was a fraudulent act which was not disclosed to the stock exchange - HELD THAT:- We find that the controversy involved in the present appeal is squarely covered by a recent decision of this Tribunal in Prafull Anubhai Shah [2021 (6) TMI 1159 - SECURITIES APPELLATE TRIBUNAL, MUMBAI] held that merely because the appellant was present when the resolution dated July 27, 2006 was passed, no conclusion can be drawn that this was the starting point of the fraudulent arrangement for issuance of GDR and for opening a bank account. The resolution does not given any indication that the appellant had knowledge beforehand that the GDR issue was the purpose to manipulate the price or the market or that a fraud would be played upon the shareholders and the investors. We are further of the opinion that finding of the WTM that the resolution of the Board of Directors provides execution of a pledge or execution of a charge agreement is wholly erroneous, perverse and based on no evidence. The resolution also does not stipulate that the proceeds could be utilized by the bank as security in connection with a loan taken by another entity. In the light of the aforesaid, we are of the view that the appellant cannot be debarred only on the basis of being present in the resolution of the Board of Directors. The impugned order of the AO as well as the WTM in so far as it relates to the appellants cannot be sustained and is quashed. The appeals are allowed.
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