Rajib Kumar Mishra is exploring legal avenues to challenge SEBI’s June order, following which he ceased to be the CMD of PTC India and the non-executive director at PTC India Financial Services (PFS).

PTC India is the country’s largest power trader and the promoter of PFS, a non-banking financial company (NBFC).

“This is an appealable adjudication order by the SEBI and therefore I am trying to explore all legal avenues,” Mishra told businessline.

On June 12, the capital markets regulator restrained Mishra from holding the director’s post in any listed firm for six months and imposed a penalty of ₹10 lakh on him for corporate governance lapses. Subsequently, he ceased to be the non-executive director of PFS and CMD of PTC India.

PFS’ former MD Pawan Singh has also been prohibited from holding any position of director or key managerial personnel in any listed firm for two years and was slapped with a fine of ₹25 lakh.

PTC India also appointed Director (Commercial & Operations) Manoj Jhawar as its Chairman and Managing Director (CMD) till a regular CMD is appointed.

Crisis deepens

Sources said that Mishra was a non-executive chairman and nominee director on the board of PFS and any non-executive board member does not have any authority and delegation of power as per Articles of Association.

Another issue was the delay in the joining of Ratnesh Kumar, who was Chief General Manager at NTPC, as Director Finance at PFS. Kumar went back to NTPC after his appointment was stalled. Another source said the appointment was to be done by the HR department and not Mishra’s responsibility.

On loan disbursal, sources pointed out that all loan accounts were handled by PFS executives, including the management. The forensic audit conducted and the data requirement for that was purely in the domain of the NBFC and the availability of data and facilitation thereof was also the responsibility of its management.

“The flow of information to the independent directors (IDs) was PFS management’s responsibility and the company secretary in a timely manner,” another source said.

The source added that it is commonly used that chairman was part of the management, which is not only incorrect but also to give a certain connotation to the authority.

PFS results issue

PFS reported its FY24 results on May 30, the last date of reporting the same to the exchange. This was due to three IDs declining to recommend its annual results as the statutory auditor disagreed to drop the qualification against them for taking honorarium in the last eighteen months.

The three IDs are former Department of Public Enterprises Secretary Seema Bahuguna, former MD and CEO of Corporation Bank PV Paravathi and former Power Finance Corporation Director (Finance) N B Gupta.

The issue was resolved and the company reported its results on May 30.

The independent auditor’s report said that during the year, PFS has paid ₹4.40 lakh to the three IDs on account of their time cost ‘as honorarium’ for taking part/ joining meetings for the required activities of (including personnel interview of shortlisted candidates at senior level) the company.

“Further, as at March 31, 2024, the company has debited the amount so paid as honorarium and same is shown as receivables from said IDs. The said amount since has been refunded back by the IDs. As stated in the said note and in the opinion of the management the company is in compliance with the provisions of section 197{9) of the Companies Act, 2013,” it added.