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TMI Blog2021 (7) TMI 1433X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants from accessing the securities market for a period of one year and further directed that during this period their securities including mutual funds shall remain frozen. Since the issue is common in all the appeals they are being taken up together. 2. The facts leading to the filing of the present appeal is, that the Board of Directors of the Company known as Birla Power Solutions Ltd. passed a resolution dated 29th October, 2009 for issuance of Global Depository Receipts ('GDRs' for short). The Board of Directors also resolved in this resolution to open an account with the European American Investment Bank AG (hereinafter referred to as the 'Euram Bank') for the purpose of depositing the GDR proceeds and to use the proceeds as security in connection with the loan. The resolution also authorized Shri P.V.R. Murthy and Shri N. Nagesh as authorized signatory to sign relevant documents on behalf of the Company. Based on this resolution, the Company issued two GDR issues, the first one on 27th January, 2010 for 20.01 US million dollars and the second GDR issue was on 9th July, 2010 for 53.53 US million dollars. 3. Investigation in the issuance of the GDR revealed that the GDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed to the stock exchange. Consequently, direction and penalties were issued by the WTM and the AO. 6. We have heard Mr. Gaurav Joshi, Senior Advocate assisted by Mr. Piyush Raheja, Mr. Sahil Gandhi, Mr. Feroze Patel, Mr. Jigar Shah and Ms. Dimple Vora, Advocates for the Appellants and Mr. Sumit Rai, Advocate assisted by Mr. Abhiraj Arora, Ms. Rashi Dalmia and Mr. Karthik Narayan, Advocates for the Respondent. 7. We find that the controversy involved in the present appeal is squarely covered by a recent decision of this Tribunal in Prafull Anubhai Shah vs. SEBI dated 28th June, 2021 in Appeal no. 389 of 2021. For facility, the relevant paragraphs are extracted hereunder. "9. In our opinion, the impugned order insofar as the appellant is concerned cannot be sustained in the light of the various decisions given by us relating to the GDR issue. In Adi Cooper vs. Securities and Exchange Board of India (Appeal No. 124 of 2019 decided on November 5, 2019) this Tribunal on an almost identical issue wherein the resolution of the Board of Directors for opening an account was verbatim to the present resolution. The modus operandi was also the same. The Tribunal after analyzing held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of this Act or the rules or the regulations made thereunder; (b) employ any device, scheme or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stock exchange; (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or the rules or the regulations made thereunder" "3. Prohibition of certain dealings in securities No person shall directly or indirectly- (a) buy, sell or otherwise deal in securities in a fraudulent manner; (b) use or employ, in connection with issue, purchase or sale of any security listed or proposed to be listed in a recognized stock exchange, any manipulative or deceptive device or contrivance in contravention of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat at the time when the resolution of October 19, 2007 was passed Clifford was nowhere in the picture and therefore the concept of fraud emerging through this resolution of October 19, 2007 does not arise. There is no finding of the WTM that the appellant was aware of this arrangement of giving a loan to Clifford was in existence or the fact that a Credit Agreement or an Account Charge Agreement would be executed in the future. In the absence of any finding, the charge of collusion and/or fraud has not been proved. Further, by a deeming fiction, liability and/or culpability cannot be fastened upon the appellant only on the basis of a resolution dated October 29, 2007." 11. In Chromatic India Limited vs. Securities and Exchange Board of India (Appeal No. 393 of 2020 decided on May 12, 2021) this Tribunal held:- "14. Having heard the learned counsel for the parties, we are of the opinion that the Resolution dated August 13, 2010 by itself does not create any suspicion nor creates any fraudulent act. Being a signatory to the said Resolution by itself does not violate any provision of the SEBI Act or the PFUTP Regulations." 12. In the light of the aforesaid, we are of the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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