Sebi confirms ban on buying and selling of shares by promoters of Zylog Systems

Show cause notice issued for violation of Takeover Regulations, 2011

Stock market regulator Securities and Exchange Board of India (Sebi) has issued an order confirming the directions issued by Sebi on 13 June 2013 restraining promoters and officials of Zylog Systems from buying, selling or dealing in the securities markets, either directly or indirectly, in any manner, till further directions. In an order issued yesterday, 30 July 2015, Sebi said that directions issued vide the interim order on 13 June 2013 Zylog Systems (ZSL) promoter Sthithi Insurance Services Pvt. Ltd, promoter, Chairman and Chief Executive Officer of ZSL Sudarshan Venkatraman, promoter, Managing Director and Chief Operating Officer of ZSL Ramanujam Sesharathnam, ZSL's Whole Time Director Parthasarathy Srikanth, Srikanth Sripriya (wife of Parthasarathy Srikanth) and ex-Chief Financial Officer of ZSL S. P. Srihari shall continue to be in force till further directions.

Sebi has alleged misleading disclosures by the ZSL and its promoters, promoter using company funds to deal in shares of ZSL, dependent (spouse) of director using funds of ZSL to deal in its shares, non-compliance of Takeover Regulations, 2011, non disclosures by ZSL and its promoters and non disclosures by director of ZSL. Sebi has also issued a show cause notice to Mr. Ramanujam, Mr. Sudarshan, Mr. Srikanth, Ms. Sripriya, and Sthithi as to why appropriate action under the provisions of Takeovers Regulations, 2011, including the direction to make public announcement to acquire shares of the company in accordance with Takeover Regulations, 2011 should not be taken against them. According to Sebi's investigations, the promoters of ZSL along with person acting in concert (Ms. Sripriya) with them acquired more than 5% of voting rights in ZSL during the financial year 2012-2013 without making public announcement as required under regulation 3(2) of the Takeovers Regulations, 2011.

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