The Securities Appellate Tribunal (SAT) has granted an interim stay on an order by market regulator Securities and Exchange Board of India (SEBI) in the matter pertaining to corporate governance lapses in PTC India Financial Services (PFS) that penalised former non-executive director Rajib Kumar Mishra, according to an order dated June 21.
Mishra, who was also the chairman and managing director of PFS’ parent company PTC India, and PFS' former MD and CEO Pawan Singh were fined Rs 10 lakh and Rs 25 lakh, respectively by the market regulator in an order dated June 12. SEBI also barred Mishra and Singh from holding any board or key managerial personnel position in any listed company for a period of six months and two years, respectively.
Mishra has to step down from his position in PTC and PFS after the order. He challenged the order at SAT.
The appellate granted the counsel for SEBI four weeks time to file a reply and thereafter, Mishra will have two weeks to file a rejoinder, if any.
“In the meantime, the operation of the impugned order shall remain stayed till the next date of hearing subject to deposit of 50% of the penalty amount by the appellant with the SEBI within two weeks from today (June 21),” SAT said.
The appellate has scheduled the next hearing on August 2.
PFS, the non-banking financial subsidiary of PTC India, has been under a regulatory scanner for over two years since three independent directors resigned from the company’s board flagging concerns over corporate governance issues on January 19, 2022. In addition to the SEBI investigation, the Reserve Bank of India (RBI) is also looking at the irregularities in PFS. Separately, in June 2023, the Registrar of Companies (ROC) found both PFS and Singh in violation of The Companies Act, 2013 and penalised both entities in three separate adjudication orders.
Singh was forced to go on leave in June 2023 until his retirement, in-line with a directive from the RBI. Mishra continued to hold positions in both companies until SEBI’s recent order.
On June 13, PTC India said that its Director (Commercial & Operations) Manoj Jhawar has been appointed as the CMD of the company till a regular is in place.
PTC India owns 64.99 percent shares in PFS. PTC, in turn, is owned by Public Sector Undertakings (PSUs) –NTPC Ltd, NHPC Ltd, Power Grid Corporation of India Ltd and Power Finance Corporation Ltd– each holding 4.05 percent in the company. On June 29, 2023, Mishra's appointment at the top job in PTC India was backed by PSU promoters despite regulatory scrutiny.
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