There will be fair inquiry into alleged governance issues at PFS: Promoter

PTC India Chairman and Managing Director Rajib K Mishra on Friday said there will be a fair inquiry into alleged corporate governance issues at its subsidiary PFS where all independent directors resigned enmasse over the issues.

In an unusual development, all three independent directors of PTC India Financial Services (PFS), which is a systemically-important Non-Banking Finance Company (NBFC) -- put in their papers on Wednesday. Kamlesh Shivji Vikamsey, Santosh B Nayar and Thomas Mathew T had resigned on the grounds of corporate governance issues at the company.

Against this backdrop, Mishra, who is part of the PFS board, said the company's board will be meeting on January 22 (Saturday) while the board of PTC India will hold its meeting on January 27 (Thursday).

Addressing a virtual press meet, Mishra said that a senior level committee is looking into the issues raised by the independent directors and the committee would be submitting its report to the board of PTC India.

He assured a fair inquiry into the allegations.

If there is need, then the company would rope in a third party to ensure independence and impartial inquiry, he said.

Mishra also made it clear that the decision about a third party inquiry would be taken by the board of the PTC India after going through the senior level committee's report.

The committee has been constituted by the board of PTC India.

About the three independent directors quitting the board of PFS, Mishra raised doubts about their intentions, saying that the resignation letters of two directors are almost the same.

He also pointed out that there were many factual errors in the resignation letters of the directors.

When asked about the agenda for the meeting of PFS board on Saturday, Mishra did not divulge any details, saying it was confidential.

He assured that independent directors will be appointed on PFS board at the earliest.

At present, Mishra and Pankaj Goel are nominee directors on the board of PFS while Pawan Singh is Managing Director and CEO.

As per norms, PFS should have three independent directors on its board.

On Thursday, a day after the enmasse resignations of the independent directors, PFS told the stock exchanges, "we are in receipt of resignations from three independent directors mentioning some reasons".

"We refute the allegations by the outgoing directors, which were due to our adherence to best corporate governance practices under guidance of promoter, regulator and Government of India," the company had said.

It had also said the matter will be addressed at the board level and subsequent update will be communicated to all the stakeholders appropriately.

On Thursday, PTC India admitted that "there are difference of opinion at operation & board level of PFS on few issues".

In their resignation letters, the three independent directors had alleged that certain actions of the chairman of the board and managing director of the company are "ultra-vires" and "in violation" of the provisions of the Companies Act, 2013.

The independent directors had also referred to issues regarding a Rs 125 crore bridge loan given to NSL Nagapatnam Power and Infratech Pvt Ltd, besides alleging that "no action" has been taken on certain corporate governance matters.

Pointing out that independent directors' communications were blatantly ignored, they had said "such non-cooperation on the part of the management and the company is unfortunate and a deterrent to the spirit of the law and impedes the functioning of the independent directors on the board of the listed company."

PFS, promoted by PTC India, is registered with the RBI and is a systemically-important non-deposit taking NBFC. It has been classified as an 'Infrastructure Finance Company (IFC)' by the RBI.