The Securities and Exchange Board of India (Sebi) has decided to take no action against two of the former directors of Zylog Systems in relation to alleged violation of its regulations.
The order comes in connection with an allegation that the company did not pay the dividend declared by it in September, 2012. Market regulator has issued show cause notices to two of the directors, S Rajagopal and V K Ramani, as to why suitable directions for violation of the Companies Act, 1956 should not be issued against them.
According to the provisions, the directors were statutorily required to deposit the amount of dividend declared into a separate bank within five days of such declaration. The Board had declared a dividend of Rs 16.44 crore.
Both the directors submitted their response and the market regulator observed that they have taken strong stands to convince the company's board about the necessity of ensuring compliance with the regulation and as the company failed to comply, they resigned from the Company's Board.
Sebi Whole Time Member G Mahalingam, in an order issued on Tuesday, disposed the matter observing that since both the individuals have no role in the day-to-day management of the company and have discharged their responsibility as Independent Directors, it is not deemed fit to pass any direction against them.