Sebi bars acting PFS Chairman from holding board seats

13 June 2024

Synopsis

The regulator has also banned Pawan Singh, former chief executive of PFS from holding any position of director or key managerial personnel in any listed company or intermediary for two years. It has also imposed a penalty of Rs 25 lakh on Singh.

Sebi bars acting PFS Chairman from holding board seats

The Securities and Exchange Board of India(Sebi) has barred PTC India Financial Services (PFS) chairman Rajib Kumar Mishra from holding the director’s post in any listed company for six months and imposed a fine of Rs 10 lakhs on him.

Mishra is also the chairman and managing director of PTC India, a promoter firm of PFS.

The regulator has also banned Pawan Singh, former chief executive of PFS from holding any position of director or key managerial personnel in any listed company or intermediary for two years. It has also imposed a penalty of Rs 25 lakh on Singh.

Sebi alleged that Pawan Singh had ‘grossly misused’ his position as the chief executive of PFS to prevent Mr. Ratnesh from joining as whole-time director (Finance) and CFO(chief financial officer), which was approved by the Board of PFS.

“The MD & CEO in a company, though sitting at a high position within the management hierarchy, is duty-bound to follow the decisions of the Board of his company and cannot exercise his power unilaterally in an unfettered manner. However, in this case, the MD & CEO employed all the tricks to defeat the decision of PFS Board to appoint Mr. Ratnesh, thereby keeping a critical vacancy in the Company unfilled,” Sebi whole time member Ashwani Bhatia said in his order on Wednesday.

The regulator said Singh not only undermined the board process by not being transparent with the board and working against its decisions, he also flouted SEBI’s direction not to change the structure and composition of the board.

“The said acts of disregarding regulators’ directions reflected poorly on the conduct of Noticees 1 (Singh) and 2(Mishra),as Board members of PFS,” Bhatia said.

The regulator alleged that Singh made a delayed disclosure of forensic audit report on loans to Nagapatnam Power and lnfratech to the board of PFS after two years of completion of forensic audit.

On Mishra, Sebi alleged that being the chairman of PFS, he had all the authority to set things right by looking into the issues raised by the independent directors.

“However, he looked the other way while Noticee 1 (Singh) ran the company as per his wishes, disregarding the concerns raised by the independent directors. Accordingly, the role of Noticee 2 (Mishra) in flouting the norms of corporate governance in this matter is well established,” Sebi said in its order.

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