Submit action taken report on corporate governance within a month: SEBI to PFS 

In a major setback for the crisis-ridden PTC India Financial Services (PFS), markets regulator SEBI directed the firm to first address all issues, including those concerning corporate governance, raised by the Ex-Chairman and Independent Directors (IDs) before resigning, the non-banking financial company (NBFC) said on Sunday adding that it has to submit an action taken report in a month. A subsidiary of state-run power trading company PTC India, PFS, was scheduled to hold a Board meeting on Saturday to take forward selecting independent directors, which could not take place due to lack of quorum in the Board. It was to replace the three independent directors of PFS — Kamlesh Shivji Vikamsey, Santosh B Nayar, and Thomas Mathew T — who resigned on Wednesday, alleging serious corporate governance issues.

Direction by SEBI

“It is informed that the company has received a communication dated January 22, 2022 from the SEBI informing that the company is directed to address the corporate governance issues and all other issues raised by the resigning IDs and ex-Chairperson first, before holding any Board meeting and to file an action taken report in the regard to SEBI within 4 weeks,” PFS said in a regulatory filing on stock exchanges.

“In this regard, we would like to mention that a meeting of the Board of Directors was scheduled to be held on January 22, however as the company does not have quorum in compliance of SEBI (LODR) Regulations, 2015, therefore, the same could not be held. Further, the company has filed an application with SEBI for seeking exemption from relevant provisions of SEBI (LODR) Regulations, 2015 to schedule the Board meeting for the appointment of IDs,” it added. At present, the PFS board comprises the MD & CEO Pawan Singh as well as promoter group nominees, Rajib Kumar Mishra and Pankaj Goel.

Issues raised by ex-Chairman

The firm also tried to play down the “corporate governance” issues raised by its former CMD Deepak Amitabh in a board meeting in August 5, 2021. This was one of the claims made by the independent directors. Amitabh resigned on personal grounds in November 2021 after staying with the firm for 18 years. Countering the charge, the company said, “It is pertinent to mention that PFS MD & CEO addressed all the concerns of the Ex-Chairman in the same board meeting. On the same date the Board, including Ex-Chairman and outgoing independent directors, provided a clean corporate governance report in the board report for the financial year ending March 31, 2021 and acknowledged with deep appreciation the co-operation received from directors”. “We further wish to inform that subsequently on September 24, 2021 Ex- Chairman addressed the shareholders of the company in 15th Annual General Meeting with appreciation to the company and mentioning no concern related to corporate governance,” the embattled firm emphasised. Matters for PFS escalated further on Friday after Rakesh Kacker, an independent director on PTC India’s board, resigned, with immediate effect, citing serious corporate governance issues. Kacker, a retired IAS officer, was an independent director with PTC from April 2017 and with PFS from October 2019. At PTC, he chaired the committee on ‘nomination & remuneration’ and was a member of the ‘risk management’ committee under the board of directors.

Brief respite

Meanwhile, IL&FS Tamil Nadu Power (ITPCL), in a statement on Friday, said, “ITPCL loan account has not been declared a fraud by any lender till date and, as such, has not been reported as a fraud in RBI CRILC reporting. Any such information/mention of the account being declared as fraud is factually incorrect.” This was in response to allegations made by Vikamsey on waiver of special conditions to ITPCL.