In a significant development, four out of the six non-executive independent directors on the board of PTC India have resigned in the last two days. The directors in their resignation letters have raised concerns over governance issues.

According to a BSE filing on Tuesday by the power trading firm, Sushama Nath, Jayant Purushottam Gokhale and Subhash S Mundra resigned as independent directors from the company’s board. They resigned with effect from Monday (December 5).

Similarly, on Wednesday, the company said another non-executive independent director, Preeti Saran has resigned from the post with effect from Tuesday (December 6). The company had a total of six non-executive independent directors on its board. Only two directors remain now on the company’s board.

PTC India did not respond to queries from the businessline till the time of going to press.

Governance issues

In his resignation letter, Gokhale, who was the chairman of the audit committee of the board, said, “It is only in the last 12 months that certain issues of governance, compliance and management in PFS — a material subsidiary of PTC, came to the fore. Since then, for reasons briefly enumerated below, approach of the PTC management and the atmosphere in the board has been significantly vitiated. The company (PTC) has seen a steady downslide in terms of approach towards the independent directors, issues of governance and compliance. I have, therefore, taken a call to resign from the Board due to the prevalence of certain factors which I, believe, have in the past year constrained me from contributing meaningfully to the proceedings of the Board.”

In his letter to the board, Mudra said, “A trend has now developed in the company wherein almost all the Board meetings are called at short notice and agenda papers are circulated with even shorter duration before the meetings.”

Nath in her letter said, “However, ever since the issues in its subsidiary, PFS, following the resignation of its Independent Directors, came to the fore in the past 11 months or so, governance norms have also taken a hit in PTC. Specifically, in relation to the report submitted by Chairman RMC on the matters raised by 3 Independent directors of PFS in their resignation letters in January 2022, the board of directors of PTC has by a majority decision chosen to turn a blind eye on the corporate governance lapses in PFS.”

Saran, who also resigned from the board of PFS on December 6, said corporate governance norms have been adversely affected in PTC following developments in the last 11 months in its subsidiary PTC Financial Services Ltd (PFS).

PFS director resignation

So far three independent directors have resigned from the PTC India Financial Services (PFS) board. PTC India is the holding company of the non-banking financial company (NBFC).

In a related development last week, Gokhale and Devendra Swaroop Saksena resigned as independent directors from the board of PTC India Financial Services (PFS) on December 2. Saksena is also an independent director on PTC India Board.

In January 2022, PFS courted controversy after three of its independent directors resigned from the board alleging serious corporate governance issues. Subsequently, PFS was directed by the SEBI to first address the corporate governance issues at the firm and was barred from reporting quarterly results till they address these issues.