Court-appointed liquidator takes charge of Zylog Systems

As per an order by the Court in August, the company has to make all descission with concurrence of Official Liquidator

The Madras High Court has asked public listed IT firm Zylog Systems Ltd to make all the administrative decisions only with the concurrence of the Official Liquidator appointed by the Court and not to spend money without the consent of the official.

The Office of the Official Liquidator has informed the Bombay Stock Exchange that the Madras High Court, by an order dated July 3, 2014, appointed the Official Liquidator the Provisional Liquidator of the company, with directions to take charge of all the properties and effects of the company.

The High Court, on August 21, 2014, has directed the Official Liquidator to take over of all the money transactions and the accounts of Zylog Systems Ltd and also issued directions to Zylog Systems Ltd to make all the administrative decisions only with the concurrence of the Official Liquidator, High Court, Madras. Besides, no money can be spent without the consent of the official Liquidator.

According to a data released by All India Bank Employees Association (AIBEA) in Chennai, Zylog System and its related firms has a total of around Rs 1,430 crore. Of this, the highest reported is from Union Bank o f India, at Rs 388.76 crore.

As reported earlier, the crisis ridden company, might consider removal of Sudarshan Venkatraman as Director, Chairman and CEO of the company, as some of its shareholders has issued a special notice seeking passing of such a resolution in the upcoming Annual General Meeting (AGM) of the company.

A notice has been issued by the company to the shareholders informing that certain shareholders holding requisite shares in the company has issued a special notice seeking passing of resolutions including one on removal of the Chairman, for shareholders' approval.

It may be noted that promoters of the company has been holding around 2.80 per cent share in the company while the promoters' encumbered shares is 81.88 per cent. Among the promoters and promoters' group shares, Sudarshan Venkatraman holds 4,73,500 shares in the company, as on September 30, 2014, according to a company filing with the Bombay Stock Exchange.

According to recent reports, the company has sold its IT and engineering professional serivices firm Canada-based Brainhunter, which it acquired in 2010 for Rs 31 crore, to Thomas Cook's staffing services firm Ikya.

Reports also say that the company, which has been growing in the past, faced issues after some of the lenders went for a margin call selling promoters' share held with them. The company posted a net loss of Rs 54.66 crore during the quarter ended June 30, 2014, as compared to the net loss of Rs 35.27 crore during the same period of previous year.