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Resignation of Ind Directors: PTC India board’s panel to submit report on governance issues by Feb 28

Our Bureau | | Updated on: Jan 28, 2022

CHENNAI : TAMILNADU : 04/02/209 : FOR CITY: High Tension power cables do promise total support to the growth in industrial front and normal life. A scene near Tirunelveli. Photo : K. Pichumani/ The Hindu | Photo Credit: PICHUMANI K

The crisis in PFS started after three independent directors resigned on January 19

The Board of Directors of PTC India, the parent firm of crisis-ridden PTC India Financial Services (PFS), have directed its risk management committee (RMC) to review the corporate governance issues arising due to resignation of three independent directors of the NBFC and one from the power trading company. The RMC has to submit a report in 30 days.

PTC India CMD In-Charge Rajib K Mishra said on Friday, “The board, in its meeting held yesterday (January 27), has directed the RMC of the company represented by three independent directors (IDs) and one nominee of promoter to go into details on all the governance issues of PFS arising out of resignation of three IDs and one ID of PTC India as also the RBI report of PFS. The RMC has been requested to submit its report to the Board within in 30 days”.

Senior Power Ministry official, Raghuraj Madhav Rajendran was appointed as nominee director of the Ministry on the board of PTC India with effect from Thursday. Rajendran is posted as a Joint Secretary in the Power Ministry.

The promoter group of PTC India, comprising of NHPC, NTPC, Power Grid and PFC, collectively holds 16.22 per cent stake. Besides, Damodar Valley Corp holds 3.38 per cent. State-run insurance giant LIC is also a shareholder. PTC India holds controlling stake (65 per cent) in PFS.

“The management of PTC India is committed towards corporate governance of highest standard in its functioning as well as of its subsidiaries. The interest of stakeholders is of prime concern and company would like to assure total transparency and ethical best practices,” Mishra assured the company’s shareholders.

The spate of developments at the power trading company assumes importance as its subsidiary, PFS, has been directed by market regulator SEBI to address corporate governance issues raised by the independent directors who have resigned from the non-banking financial company (NBFC). On January 22, SEBI directed PFS to submit a report on action taken in a month.

Independ directors resign

The crisis in PFS started after three independent directors — Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew T — resigned on January 19 alleging corporate governance issues at the systemically important non-deposit taking NBFC. This escalated further after Rakesh Kacker, an independent director on PTC India’s board, resigned on January 21 citing corporate governance issues.

The independent directors claimed that they repeatedly voiced their concerns and sought information through e-mails but were disappointed as these communications were “blatantly ignored” by PFS management.

PFS was scheduled to hold a board meeting on January 22 to select independent directors, but could not do so as it did not have the mandated quorum nor the go ahead from the regulator. Now PFS can only hold a board meeting after it submits an action taken report to the SEBI by February-end. 

Published on January 28, 2022
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