Regulators to seek PTC reply on directors’ exit
Jayshree P Upadhyay & Ravi Dutt Mishra
MUMBAI/NEW DELHI: The exodus of independent directors at PTC India Financial Services Ltd over corporate governance issues has prompted several regulators to seek a response from the company on the allegations levelled by the directors, said two people with direct knowledge of the matter.
The Securities and Exchange Board of India (Sebi), the RBI, and the corporate affairs ministry are in the process of writing to the non-bank lender to power projects, seeking the company’s response to the exits of directors, one of the two people cited above said.
Independent directors, who made up half of the board at PTC India, resigned on Wednesday, sending the stock plunging by as much as 19% when markets opened on Thursday. Shares of Parent PTC India also felt the heat, plummeting 11%.
In a bid to assuage investors, the lender said that the matter will be “addressed at the board level and subsequent updates will be communicated to all the stakeholders appropriately”. In a detailed statement later in the day, the management refuted the allegations. “We refute the allegations by the outgoing directors, which were due to our adherence to best corporate governance practices under guidance of promoter, regulator and the government of India,” it said. When asked about the firm’s response to the questions raised by regulators, a senior executive at PTC India Financial said company will respond “when references are made”.
PTC India issued a statement to the exchanges saying that it is committed to corporate governance of the highest standard in its functioning. “We are closely monitoring the situation and observed that there are differences of opinion at operation and board level of PFS on few issues. These issues are being looked into by a senior-level committee of the company. We have taken initiatives to address governance issues. We are committed towards streamlining all operational processes and adopting best available practices of an NBFC,” said PTC India.
An after-market hours corporate filing by PTC India Financial on Wednesday said independent directors Kamlesh Vikamsey, Thomas Mathew, and Santosh Nayar resigned, highlighting “instances of serious lapses in corporate governance”. Among the issues raised by the directors was the appointment of Ratnesh as finance director and chief financial officer. The directors alleged that the chairman and managing director put on hold the joining of Ratnesh even after his appointment was concluded via a “board-run process”.
Describing another instance of “misleading” investors and the board, Vikamsey said the fraud committed by a borrower, IL&FS Tamil Nadu Power, was not reported to the board.