Relief to ex PTC CMD in corporate governance case, SEBI says not liable for violations

The Securities and Exchange Board of India (SEBI) has disposed of the show cause notice issued to Dr. Rajib Kumar Mishra, former Chairman and Managing Director of PTC India Ltd, without issuing any directions or penalties. In its order, SEBI noted that the examination did not bring out how an individual CMD alone could cause concerns on corporate governance and that no clear evidence or material had been established to prove the allegations.

The case arose after the resignation of four independent directors in December 2022, who raised governance concerns in their letters. This, along with shareholder complaints and media reports, prompted SEBI to issue a show cause notice in January 2025 accusing Mishra of failing to deliberate on directors’ concerns, influencing the Nomination and Remuneration Committee in the process of appointing a CMD, and ignoring shareholder complaints, among other lapses. SEBI also questioned legal expenses of over Rs 55 lakh incurred during his tenure and his use of an office computer even after an earlier SEBI order had restrained him in June 2024.

SEBI underlined that its examination found no clear evidence that Mishra alone could be held responsible for corporate governance lapses. The regulator stressed that board governance is collective in nature and that all key decisions, were taken by the board, often unanimously, and with the participation of government and public sector nominees. SEBI pointed out that the eligibility criteria for the CMD role were not set by Mishra individually and were approved by the NRC in October 2022, and ratified by the full board in November 2022. Likewise, the allegation that his appointment was rushed was found to be unfounded, as past CMD appointments had also followed the same-day recommendation and approval process.

On the independent directors’ concerns, SEBI found that their resignation letters were formally noted and discussed by the board in December 2022. The matter of legal expenses was resolved after PTC India’s board, in December 2024, directed that no recovery be made from Mishra, effectively validating that the payments were within the company’s delegation of powers. The  records also showed that the board approved the buyback of old assets, including the desktop, and released all retirement dues, which indicated no wrongdoing.