Securities and Exchange Board of India (Sebi) today barred six promoters and entities of technology company Zenith Infotech (ZIL) from the capital markets for alleged violation Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.
These include Devita Saraf, Vijayrani Saraf, Zenith Technologies, Vu Technologies, Rajkumar Saraf and Akash Saraf.
Sebi in its order has alleged that out of $48 million sale proceeds of company's Managed Services Business (MSD) division of ZIL, an amount of $33.93 million was “diverted for the purposes that were not even remotely connected to the authorization of the shareholders.”
“The sequence of events and pattern of transactions in this case prima facie indicate that the ZIL and its promoters/directors not only want only defaulted in redemption of FCCBs and disregarded shareholders' resolution but also adopted fraudulent device and artifice to defraud the shareholders,”Rajeev Kumar Agarwal, whole time member, said in a order today.
Sebi has directed directors of ZIL to furnish, within 30 days, bank guarantees of $33.93 million, which is the amount of sale proceeds of MSD Division that was diverted. Sebi has said such guarantees should be created without using the funds of ZIL or creating any charge on assets of ZIL.
“The bank guarantee may be invoked in case any adverse inference is drawn by Sebi in its final order with regard to the actions of Board of directors/promoters of ZIL in diverting the sale proceeds of MSD Division and Sebi deems it necessary to compensate ZIL,” the order said.