Sebi bans chief of Zylog Systems

Sebi investigation found that Zylog Systems, its promoters and directors allegedly made 'false, misleading and distorted disclosures repeatedly'

The Securities and Exchange Board of India (Sebi) on Wednesday barred Sudarshan Venkatraman, chairman and chief executive officer of Zylog Systems, along with five other entities, from the securities market for violation of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms.

A Sebi investigation found Zylog Systems, its promoters and directors allegedly made “false, misleading and distorted disclosures repeatedly” and failed to make requisite disclosures under the Takeover Regulations.

Shares of Zylog plunged nearly 75 per cent from Rs 300 in October 2012 to about Rs 77 in November 2012.

Prima facie the Sebi investigation found the company had allegedly provided false and incorrect disclosure to the stock exchange about the quantum of shares pledged by its promoters. Also, the disclosures were made in a distorted manner. In an interim order, Sebi whole-time member Rajeev Kumar Agarwal said, “This is also a fit case where Sebi needs to send a stern message to deter companies and their promoters / directors from indulging in such acts of unethical, unfair and fraudulent behaviour, as observed in this case.”