Zenith Infotech, together with its promoters Rajkumar Saraf and Akash Saraf, have reached a settlement with the Securities and Exchange Board of India (Sebi) in a long-standing case by making a consent payment of Rs 3.56 crore. As a result of the settlement, the 12-year old case is officially over, ending a dispute that focused on allegations of asset stripping and lapses in disclosures. The Special Bench of the Sessions Court for Greater Mumbai approved the settlement, lifted all market prohibitions against the company and its directors, and provided a clean legal closure. The payment was made on September 9, 2025, pursuant to Sebi’s consent mechanism, which allows disputes to be resolved without admitting or denying guilt.
Zenith Infotech SEBI Settlement Details and Timeline
The Sebi’s case against Zenith Infotech and its promoters stemmed from an interim order issued in March 2013, wherein Sebi had alleged improper disclosures, diversions of funds and asset stripping concerning a default on foreign currency convertible bonds (FCCBs). Zenith Infotech and the Saraf promoters were subsequently barred from accessing capital markets. After extensive investigations (including coordinated investigations with regulators in other jurisdictions such as the Monetary Authority of Singapore), there was no evidence of siphoning, asset stripping or insider trading established against Zenith Infotech with regard to the allegations made by Sebi. In fact, a 2018 Sebi order repeated the same findings, asserting that no personal enrichment or criminal activity had occurred.
Thereafter, Sebi’s High-Powered Advisory Committee (HPAC) had recommended a settlement of the case through a consent fee, which was agreeable to both the Sebi and Zenith Infotech parties and led to a payment of Rs 3.56 crore. The Sebi did not award the recommendation any arbitrariness and settled the matter effectively removing all restrictions on the company and its promoters.
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History and Background of the Zenith Infotech SEBI Case
Zenith Infotech, a technology company headquartered in Mumbai and owned by Rajkumar and Akash Saraf, had its share of regulatory problems regarding its financial engagements—specifically defaulting on more than $83 million in Foreign Currency Convertible Bonds (FCCBs). These matters dated back to asset transfers and capital market related activities conducted between 2006 and 2013, but they were brought to the forefront with allegations regarding a default on capital raised by FCCBs by the Sarafs. Following their default, the business was subject to investigations by Sebi, the bondholders Ed, and accusations of undisclosed transactions and challenged sale of its assets.
With all of this at hand, Sebi took a hard line against the company due to the allegations outlined above. Meanwhile, court-ordered sales of segments of the company’s business were completed and its assets among other judgment concerns were valued for purposes of collecting for the bondholders. In each and every step of this case under investigations and as complaints were pursued, highly detailed investigations kept the worst of the allegations from being upheld and the regulatory pressure abated into negotiations for settlement in an agreed manner through the Sebi consent route.
Overall, this settlement is an important moment—not just for Zenith Infotech, but also a moment that reflects the evolution in regulatory approach for Sebi where they prioritize enforcement or litigation; they were given viable settlement options to avoid a protracted legal case.
Impact of SEBI Settlement on Zenith Infotech and Investors
The settlement should improve the mood of investors in Zenith Infotech as it removes any legal overhang; more importantly, it can help restore the business’s credibility. The removal of restrictions allows the company and its promoters to re-enter capital markets or seek new growth opportunities without the regulatory baggage of its prior complications. Additionally, it sends a wider message to the Indian corporate sector that Sebi’s consent mechanism is a credible, efficient, and alternative route towards resolving long-standing disputes, in turn facilitating a more streamlined functioning of the capital markets.
Investors and other market participants will also view this as ameliorative in what has otherwise continued to be a fluid regulatory environment, and perhaps stabilize related technology stocks and enhance confidence.
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How Zenith Infotech Can Leverage the SEBI Case Resolution
With the conclusion of this 12-year legal battle, Zenith Infotech and its promoters look forward to growth and innovation away from regulatory risk. This resolution underscores the need for transparency in corporate governance and regulatory cooperation in today’s capital markets. Stakeholders should monitor Zenith’s next steps as it maximizes this reinvigorated market access.
For companies which are still entangled in legacy regulatory cases, Sebi’s consent mechanism presents a pragmatic resolution process, and one that is worth engaging in, to restore their operational momentum and investor confidence.
