SEBI Asks PFS To Address CG Issues Before Holding Board Meet, Seeks Report In A Month

The Securities and Exchange Board of India (SEBI) has asked PTC India Financial Services (PFS) to address corporate governance and other issues raised by its former Chairman and outgoing Independent Directors, before holding its board meeting.

The capital markets regulator has also asked PFS to file an Action Taken Report on these issues within four weeks, the company said in a regulatory filing.

A meeting of the Board of Directors was scheduled to be held on January 22, 2022, however, as the company did not have a quorum in compliance with SEBI (LODR) Regulations, 2015, therefore, the same could not be held, the filing said.

On January 22, PFS could not hold its board meeting in the absence of its three independent directors -- Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew -- who resigned en masse from the board of PFS citing corporate governance and other issues on January 19.

"The company has received a communication dated 22nd January 2022 from the SEBI informing that the company is directed to address the CG (corporate governance) issues and all other issues raised by the resigning IDs (independent directors) and ex-Chairperson first, before holding any Board meeting and to file an action taken report in the regard to SEBI within 4 weeks," the company said in the regulatory filing.

Further, the company has filed an application with SEBI for seeking exemption from relevant provisions of SEBI (LODR) Regulations, 2015 to schedule the Board meeting for appointment of Independent Directors, it informed.

The Independent Directors of the company resigned on January 19, 2022 mentioning corporate governance issues as raised by the ex-Chairman in the PFS Board Meeting dated August 5, 2021, it stated.

It is pertinent to mention that PFS MD & CEO addressed all the concerns of the ex-Chairman in the same board meeting, the company explained.

On the same date (5th August 2021) the Board, including Ex-Chairman and outgoing independent directors, provided a clean corporate governance report in the board report for the financial year ending March 31, 2021, and acknowledged with deep appreciation the co-operation received from directors, it further stated.

Subsequently, on September 24, 2021, ex-Chairman addressed the shareholders of the company in the 15th Annual General Meeting with appreciation to the company and mentioning no concern related to corporate governance, it also stated.

Earlier on January 21, PTC India CMD Rajib Kumar Mishra had said in a virtual press conference that the PFS board will be meeting on Saturday. However, he had not divulged the details about the agenda of the meeting saying it was confidential.

At present, there are three members on board of the PFS, Rajib Kumar Mishra (CMD of PTC India), Pankaj Goel (CFO PTC India) and PFS MD and CEO Pawan Singh.

Last week, an independent director of the PTC India, Rakesh Kacker, in his resignation letter, had said that despite best efforts, the "independent directors could not convince the management of PTC and PFS to take proper action to run the company in accordance with what we considered the correct course of action".

"As a result, the company is now facing serious governance issues with several defaults of the Companies Act, 2013 and the Securities &  Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015. Due to this, the operations of the company also must have been affected," he had said in the letter.

PFS, a systemically-important Non-Banking Finance Company (NBFC), is promoted by PTC India.