Markets regulator Sebi has imposed a fine totalling Rs 2 crore on seven entities including promoters and former senior officials of Zylog Systems Ltd for violating several market norms while dealing in the firm’s scrip.
Out of the entities facing a penalty, Sthithi Insurance Services, Sudarshan Venkataraman and Ramanujam Sesharathnam were promoters of Zylog.
Besides, Vekantaraman is the former chairman and chief executive officer, while Sesharathnam was managing director and chief operating officer of the firm and M V Ganesan was its vice president-corporate accounts.
Sebi found that certain entities who were found to be a person acting in concert had acquired shares in excess of 5 per cent and 10 per cent.
Therefore, in terms of Substantial Acquisition of Shares and Takeovers norms, they were required to make a public announcement of an open offer for acquiring shares of Zylog.
However, they failed to do so, the Securities and Exchange Board of India (Sebi) said in an order passed on Tuesday.
Also, Venkataraman and Sesharathnam created a scheme of dealing in Zylog’s shares whereby investors were deceived.
Some of the entities assisted in this scheme by acting on their instructions while some other entities, in whose accounts the trades took place, were participants in the scheme.
Their conduct was in violation of Prohibition of Fraudulent and Unfair Trade Practices norms, Sebi noted.
