For the second time in a row, market regulator SEBI has denied the request of crisis-hit PTC India Financial Services (PFS) to hold a board meeting without independent directors.
It may be recalled that in January this year, all the three independent directors — Kamlesh Shivji Vikamsey, Santosh B Nayar, and Thomas Mathew T — on the company’s board resigned over corporate governance issues and other matters.
PFS, which is a subsidiary of State-run power trading company PTC India, had wanted to schedule a board meeting on January 22 to take forward selection of independent directors. The market regulator, however, directed the company to first address the corporate governance issues and all other issues raised by the resigning independent directors and ex-chairperson before holding a meeting of the board.
Post this directive, PFS had submitted the point-wise reply to the allegations made by the independent directors in their resignation letters dated January 19, 2022. The action taken report as desired by SEBI was also submitted.
PFS had on February 24 again approached SEBI requesting it to allow it to convene the board meeting.
“In this regard, it is to be mentioned that SEBI vide its e-mail dated 02nd March, 2022 has informed that the company’s request for conducting board meeting without an ID has not been acceded,”, PFS said in a communication to the bourses on Thursday late evening.
PFS also said that the matter is being taken up with the SEBI for effective resolution and shareholders would be kept informed in this regard.
Lack of quorum
According to SEBI rules, a listed company should have a certain number of independent directors for meeting the quorum requirement of a board meeting.
At present, after the resignation of all the three independent directors, PFS’ board comprises MD & CEO Pawan Singh, promoter group nominees, Rajib Kumar Mishra and Pankaj Goel.
However, even in the absence of quorum the company can hold a board meeting if the market regulator were to allow for the same, company law experts said. In the PFS’ case, SEBI has refused to give that permission, they added.