The Securities and Exchange Board of India (SEBI) has advised PTC India Financial Services Ltd (PFS) to not make any changes in the board until the completion of a forensic report, which is investigating the allegations made by three independent directors who resigned together from the company in January.
On January 19, the then independent directors of PFS, a subsidiary of PTC India Ltd (PTC) – Kamlesh Shivji Vikamsey, Thomas Mathew T and Santosh B Nayar – had quit the board on concerns over lapses in governance and compliance. They submitted similarly worded resignations and other supporting documents.
After the resignations, PTC management denied all allegations but said that an internal team will probe the matter but they later directed the risk management committee (RMC) to look into corporate governance issues at PFS. After SEBI pulled up the company for not being satisfied with the action taken report, PFS appointed chartered accountants CNK & Associates LLP to conduct a third party independent forensic audit of the issues raised by the independent directors.
“The company has received a communication on 13th May, 2022 through e-mail from SEBI, wherein SEBI has noted the appointment of common independent directors of PTC India on the board of the company. Further, SEBI has also advised the company for not changing the structure and composition of its board, till the completion of forensic audit by M/s CNK & Associates LLP and submission of report by RMC of PTC India Ltd,” PFS informed the bourses late May 14.
In end-March, PFS appointed four independent directors following suggestions from parent PTC after the positions were vacant for more than two months. These are common independent directors on the board of PTC and PFS.
Moneycontrol had reported exclusively on May 3, quoting PTC chairman Rajib Kumar Mishra, that both PTC and PFS will soon hold board meeting to declare financial results for the last two quarters of 2021-22 after SEBI barred the subsidiary from holding a board meeting in view of corporate governance issues raised by former independent directors.
On January 22, SEBI asked PFS not to hold a board meeting until the corporate governance issues are addressed and the company has appointed new independent directors. Subsequently, at least two requests from the company to get approval for a board meeting were turned down by the regulator.Besides SEBI, the Reserve Bank of India has also conducted its routine audit and questioned some executives for explanations on the allegations made by the independent director. The ministry of corporate affairs has also taken cognizance of the situation and sought some preliminary information on the matter.