Shareholders oust Zylog chairman

CHENNAI: Shareholders of Zylog Systems voted out Sudarshan Venkatraman, chairman and CEO of the company, in its annual general meeting (AGM) in Chennai on Wednesday.
The company had received special notice from a shareholder seeking removal of the chairman. The reasons for seeking his ouster is not known, but it is surmised that the poor financial performance coupled with legal wrangles which the company now faces are key reasons behind the move.Venkatraman's efforts to stall the AGM through a court decree failed after the court rejected his petition and imposed certain conditions for the meet.
The court ordered that only adoption of financial statements, appointment of a director, appointment of statutory auditors, appointment of an independent director and removal of the chairman resolutions should be put to vote. Majority shareholders voted in assent of all five resolutions.
"We have gone through a financial blood bath and look forward to come out of this in another year or so with the support of our shareholders and employees," said managing director and COO of Zylog, Ram Sesharathnam. He called the removal of the chairman as a painful event for the company.
The company, (for which the High Court has appointed its official liquidator), is evaluating the viability of restructuring its debt of Rs 850 crore and is at stage two of evaluation process. Feeling a vacuum at the top, the management is also looking at inducting nearly five experienced senior executives globally to revive its business, subject to the liquidators approval. Sesharathnam added that they have not ruled out an equity increase and were in talks with some investors. However, all business transactions will need the official liquidator's approval.
For Zylog, an IT products and solutions firm, the weakening rupee has done more harm than good. Their troubles began in 2012 when promoters took short term loans pledging their shares, to meet the need for margin calls in case of their foreign currency packing credit obligation. The situation went downhill when these lenders offloaded the shares in a bulk deal on the BSE.
The staff strength of the company has fallen to 600 from almost 5,000 in 2012. As of September, promoters holding was down to a mere 2.81%.
The company scrip, which has fallen almost 90% since 2012, ended the trading day down 2% at Rs 7.71 on the BSE.