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• Therefore, I find that this transfer of funds from Scimitar to Sharad Rathi was only a collusive transfer of funds with hidden ulterior motive already explained hereinabove.
6.15 Scimitar in its reply dated July 24, 2006 admitted that there was no loan agreement between Scimitar and Rathi and no interest on the said loan was charged because of their relationship with Yash Birla group.
6.16 I note that Rathi was well known in the senior-executive circle of Yash Birla Group companies. Being introduced to Scimitar by one such executive working in Yash Birla Group, he managed to take a loan of substantial amount which was well beyond his repayment capacity, for investment in shares of DFTL. Again he was introduced by an executive of the group to the broker M/s Keynote, which was also executing orders for Scimitar and traded substantial quantity of DFTL shares. Therefore, I find that the trades done in DFTL scrip by Rathi were actually done on behalf of the promoter group entity, Scimitar and presence of a common broker and a common source of funds for trading can not be overlooked as a matter of coincidence. The common objective of both Scimitar and Rathi was to artificially raise and maintain the price at a substantial high level and create liquidity in the lowly traded scrip and also to induce others to enter into this scrip. These actions are in violation of the provisions of Regulations 3, 4(a), 4(b) and 4 (e) of PFUTP Regulations.