SEBI imposes Rs 35 lakh penalty on PTC India’s Pawan Singh, Rajib Kumar Mishra for corporate governance lapses, ETCFO

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The Securities and Exchange Board of India (SEBI) has imposed fines totling Rs 35 lakh on senior officials from PTC India Financial Services (PFS), for severe lapses in corporate governance. Rajib Kumar Mishra and Pawan Singh, the company’s director and former managing director respectively, faced penalties of Rs 10 lakh and Rs 25 lakh.

Besides slapping a penalty on the two, Sebi has also restrained Singh and Mishra from holding any Board or key managerial personnel position in any listed company or any registered intermediary or associating themselves with any listed entity which intends to raise money from the public. Singh was forced to go on leave in June 2023, following a Reserve Bank of India (RBI) directive, until his retirement. Mishra is still the non-executive chairman of PFS and the Chairman and Managing Director of the parent company PTC India. The order effectively means he will have to step down from these positions.

The order said that Singh had “grossly misused” his position as MD and CEO of PFS and that Mishra had been “acting as a willing accomplice”. In the order, Sebi WTM Ashwani Bhatia said, “While issuing the directions, I have considered that the present matter has not brought out any detail pointing to manipulation of the market or its abuse.”

The order stated that Singh had “grossly misused his position as the MD and CEO of PFS to prevent Mr. Ratnesh from joining as WTD (Finance) and CFO, 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 Ratnesh, thereby keeping a critical vacancy in the company unfilled,” the order issued by the Securities and Exchange Board of India (Sebi) on June 12 said.

The board then recommended that the NSL be reported to RBI as suspected fraud, but Singh delayed implementing this suggestion too. As the Sebi order noted, these actions showed that Singh “was running the Company as a private concern where his writ run large, even if it was to the detriment of the Company”.