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e) Prior to the issuance of GDRs by the aforesaid Issuer Companies, Vintage FZE ('Vintage'), a Dubai based company which is also 100% owned and controlled by Mr. Arun Panchariya entered into a loan agreement with Europian American Investment Bank AG ('Euram Bank') by which Euram Bank advanced millions of USD worth of loans to Vintage expressly for purchasing the GDRs to be issued by the six Issuer Companies.

f) Similarly each of the said six Issuer Companies opened accounts with Euram Bank for the purpose of crediting the GDR issue proceeds in their respective accounts with Euram Bank and each of the said six Issuer Companies pledged the said accounts to Euram Bank as security for the loans given by Euram Bank to Vintage to buy the GDRs. Pledge Agreements were also executed by each of the six Issuer Companies simultaneously along with the respective loan agreement.

g) Thus, Vintage cornered entire GDRs of all six Issuer Companies by obtaining loan from Euram Bank and the six Issuer Companies credited the GDR issue proceeds to their respective accounts with Euram Bank and pledged their accounts to Euram Bank as security for the loan taken by Vintage from Euram Bank to buy the GDRs.

h) The GDRs so acquired by Vintage were thereafter sold/ transferred to FIIs and their sub-accounts such as India Focus Cardinal Fund ('IFCF') which was 100% controlled by Mr. Arun Panchariya and Others such as the appellant herein.

11. In any event, very fact that the WTM of SEBI has discharged the show cause noticed issued to Credo by holding (see para 5.1.45 of the order) that sufficient proof has not been made available to show direct involvement of Credo in the fraud perpetrated through the GDR issue, clearly shows that the WTM of SEBI has committed an error in arriving at a contrary conclusion in case of the appellant. If Credo who had taken loan from Vintage under the loan agreement signed by Mr. Arun Panchariya for being given to the appellant was not involved in the fraud, then by the same yard stick the appellant who got loan from Credo could not be said to have involved in the fraud. Between Credo and the appellant, Credo was directly connected to Mr. Arun Panchariya, because, he had signed the loan agreement as authorized representative of Vintage. In such a case, giving the benefit of doubt to Credo but denying the benefit of doubt to the appellant who was indirectly connected with Mr. Arun Panchairya is wholly unjustified. In other words, WTM of SEBI is not justified in holding in one breath that signing of the loan agreement between Vintage and Credo by Mr. Arun Panchariya on behalf of Vintage does not show direct involvement of Credo in the fraud perpetrated through the subscription/ trading in GDRs and in another breath holding that signing of the loan agreement by Mr. Arun Panchariya on behalf of Vintage in the loan agreement between Vintage and Credo was sufficient to hold the appellant (not a party to the contract between Vintage and Credo) was privy to the fraud sought to be perpetrated by Mr. Arun Panchariya on the investors in India.