Sebi asks PFS to file action taken report on governance within four weeks

CARE Ratings monitoring developments at PFS

Securities and Exchange Board of India (Sebi) has asked PTC India Financial Services Ltd (PFS) to file an action taken report (ATR) within four weeks on corporate governance matters and issues raised by resigning directors. The capital market regulator director directed the company to address these issues before holding board meetings.

PFS, in late night filing with BSE, said the   company has received a communication dated 22nd January, 2022 from the SEBI informing that the company is directed to address the CG issues and all other issues raised by the resigning IDs and ex-Chairperson first.

A meeting of the Board of Directors was scheduled to be held on 22nd January, 2022. However, the same could not be held as the company does not have quorum required under SEBI Regulations, the company said in filing.

Further, the Company said it has filed an application with SEBI seeking exemption from relevant provisions of regulations to hold the board meeting to appoint Independent Directors. The company has already begun the process of selection and induction of three independent directors on the board.

On 19th January 2021, all three independent directors - Kamlesh Shivji Vikamsey, Thomas Mathew T. Santosh B. Nayar - resigned citing several corporate governance-related issues.

PFS said these directors resigned mentioning corporate governance issues which were raised by the Ex-Chairman in PFS board meeting held on August 05, 2021. It was pertinent to mention that PFS MD & CEO addressed all the concerns of the Ex-Chairman in the same board meeting. 

Also, on the same date the board, including Ex-Chairman and outgoing independent directors, provided a clean corporate governance report in the board report for the financial year, the company said.

Meanwhile, rating agency CARE said it will continue to monitor the outcome of the internal probe and also any possible impact of the resignation of directors on PFS’s financial performance and its liability franchise.

The company continues to have a comfortable liquidity profile. As on date, PFS has Rs 410 crore of fixed deposit against payment obligations of Rs 400 crore till March 2022. The company also has undrawn credit lines of Rs 2,000 crore, which provides further support to liquidity. Also, as per the asset liability maturity statement dated September 30, 2021, there were no negative cumulative mismatches, CARE said.