All independent directors of PTC Financial Services resign citing governance issues

All independent directors of PTC Financial Services, NBFC arm of PTC India Ltd, resigned on Wednesday citing corporate governance lapses at several occasions on part of the company management.

The three independent directors – Kamlesh Shivji Viakmsey, Thomas Mathew T and Santosh B Nayar -- have flagged serious concerns on conduct on the management of the PFS India led by managing director and CEO Pawan Singh.

In their resignations, the independent directors have alleged that actions of Singh were in violation of his powers. They have also questioned lack of action on part of PTC India, which holds 65% in the NBFC, which is expected to have debt close to Rs 11,000 crore.

PTC India acting chairman and managing director Rajib Kumar Mishra told ET that the company’s management is committed towards corporate governance of the highest standard. “The matter is getting examined and necessary steps would be taken. The interest of stakeholders is of prime concern and would be taken care by the company,” he said.

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.

“Please note that such actions of the chairman of the board and MD of the company are ultra-vires their powers and in violation of the provisions of the Companies Act 2013, which requires approval of the board for any modification of its decisions….. The company is continued to be run by a single whole time director which is risky and undesirable situation,” they said.

The independent directors have also raised questions on disbursement of Rs 125 crore loan to NSL Nagapatnam Power and Infratech. They said while previous PTC chairman Deepak Amitabh highlighted the corporate governance issues in August last year, the issues remain unresolved. Amitabh resigned from PTC India in November last year.

“The lack of action on part of the company management is alarming, especially since the company is a listed company and has obligations to not just itself as an entity but also its investors, which is general public,” they said.

The independent directors have pointed to a unilateral change in conditions of a Rs 150 crore highway loan by the company.

“Please note that it was a coincidence that such unilateral change came to the notice of the board, and it raises suspicion of many more such instances of similar nature which exist in the company, and the board oblivious on account of non-disclosure by the company,” they said.

They expressed anguish that various communications sent to the company by independent directors have been ignored.