Shareholders of Zylog Systems Ltd voted in favour of removing the company’s Chairman and CEO Sudarshan Venkatraman from his post at the company’s 18th Annual General Meeting held here today.
The reason for moving the special resolution by one of the eight major shareholders was not revealed at the meeting. However, company sources said it was moved ‘due to lack of confidence in’ and ‘mismanagement’ by Venkatraman in running the company which has run in to a debt of nearly ₹950 crore.
Ramanujam Sesharathnam, Managing Director and Chief Operating Officer of Zylog Systems, will now run the company, which is now under provisional liquidation.
Zylog went through liquidity crisis since June 2012 and the net worth in 2014 financial year eroded to the tune of ₹513 crore, says the company’s 2013-14 annual report.
Sesharathnam said IDBI Capital is helping the company with a restructuring plan. The biggest challenge is getting back employees. The company’s employee strength dropped to 697 from 5,435 two years ago. This includes nearly 1,200 employees in Canada, he said. “We have an annual revenue order book of nearly ₹900 crore on a consolidated basis,” he told newspersons.
“A blueprint should be ready in six months and the restructuring should be done in a year. Our top priority is to boost employee confidence and bring more many employees on board,” Sesharatham said.
For the quarter ended June 30, 2014 the company reported a net loss of ₹54.66 crore against a net loss of ₹35.27 crore for the same period of previous year.
On the BSE, the company’s stock price dropped by 2.16 per cent end at ₹7.71.