All 3 independent directors of PTC Indian Financial Services (PFS) have resigned citing corporate governance concerns. I don’t remember something like this happening before.
Key points to note –
- PFS is the NBFC subsidiary of PTC India (65% ownership)
- Independent directors have raised corporate governance concerns especially on the MD & CEO of PFS, Pawan Singh. They have alleged that actions of Singh were in violation of his powers. They have also questioned lack of action on part of the parent, PTC India.
- The independent directors alleged that Singh unilaterally decided to put on hold the Company Board’s decision to appoint Ratnesh as PFS Director Finance and Chief Financial Officer. If this is true, it is gross violation of the provisions of the Companies Act – decision of the Board can not be over turned by an individual and only Board is empowered to make any modifications.
- The independent directors have also pointed to a unilateral change in conditions of a Rs 150 crore highway loan by the Company.
One also needs to note that before Independent Directors tendered their resignations, they would have surely tried to communicate with the Company. Only due to the lack of a satisfactory response, would they have tendered the resignations.
Irrespective of how the management of PFS or PTC India tries to defend this, the action deserves a serious scrutiny by the regulators.
PFS is a listed entity in which almost 30% is held by retail and they have all the right to get a transparent information on the issue.
SEBI bars board meeting till action report filed in 4 weeks on corporate governance issues raised by resigning independent directors, PTC India Financial tells bourses