PTC India Chairman Rajib Mishra Forced To Return Rs 10 Lakh To Co
Money was returned following concerns raised by auditors and board members with regard to the Co. bearing the legal cost of Mishra's own legal issues with Sebi
Rajib Mishra, CMD, PTC India Financial Services has been made to return nearly Rs 10 lakhs to the company. This is after PTC India's statutory auditors and a few board members had raised concerns over the company bearing the legal cost of Mishra's issues with market regulator Sebi. Misha also wrote a letter dated 17 May 2024, to the company auditors Lodha & Co. stating that he was returning Rs 9,86,631 incurred by the company towards lawyer's fee and travel.
According to the sources, it came to light from the accounts of the company that PTC India had paid around Rs 40 lakhs to M/s Subhash Mohanty, M/s SCM Associates, M/s MG Law. A note was found in the documents, which stated that the money was paid to represent the company at RBI and Sebi. But the auditors and few board members of the company were of the view that PTC India had no legal fight with SEBI or RBI and the notices were issued to Mishra and former MD Pawan Singh in their personal capacity.
On 8 May 2023, Sebi issued a show cause notice to Mishra and Pawan Singh, MD and CEO of PTC India, alleging a complete breakdown of the company's management, hiding fraud in loan accounts to keep the board in the dark on crucial forensic audit reports and not filling up crucial vacancies. Mishra's legal expenses to fight SEBI were being borne by PTC India, which when known, the statutory auditor and board members objected. Following this, Mishra returned the amount spent on the legal cost in replying to SEBI's legal notice.
Meanwhile, PTC India adjourned its May 20 board meeting, which was to consider and approve the Audited Financial Results for the fourth quarter and year ended March 31, 2024. This since the accounts of the company were not ready, which has yet again raised suspicions of further muck coming out. But the company said in a notice to the stock exchanges that the Standalone and Consolidated Financial Results for the fourth quarter and year ended 31 March 2024, are under finalisation and they would be taking up the meeting on May 25, 2024.
Auditors In The Hot Seat
Investigating authorities of the Registrar of Companies (ROC), New Delhi have now summoned the statutory auditors of PTC India regarding their probe. Gaurav Lodha, a partner at Lodha & Co. was summoned by the ROC, which said it had noticed various discrepancies in the accounts, contraventions and non-compliances. Singh was the MD and CEO who is currently on a forced leave while Mishra the former chairman is now the CMD of the company. Both are accused by SEBI of grave mis-management.
Sources say that RBI is also looking into the conduct of Mishra A SEBI notice to Mishra had called him and Singh as the “steering wheel” in the company and held them responsible for the failure of corporate governance.
A notice to Gaurav Lodha said that it had become necessary to record his statement/defence to take the probe to a logical conclusion. ROC had been examining various financial records and documents of PFS that were signed by the auditors.
Sebi Show Cause Notice
Six independent directors (IDs) resigned from PFS board in 2022 under Mishra and Singh. Issues raised by the audit committee chairman were not recorded accurately in the minutes of the meeting and both failed to objectively look into the concerns raised by resigning IDs, Sebi SCN had alleged.
Intriguingly, Singh did not allow one Ratnesh Kumar to join PFS as a whole-time director even though his appointment was cleared by the board and various committees. After waiting for months, Kumar re-joined NTPC from where he had come. Singh had opposed Kumar's appointment on the grounds that he lacked experience for working in an NBFC.
Singh and Mishra allegedly delayed for two years the disclosure of a crucial forensic audit report that revealed fraud in the loan account of Nagapatnam Power and Infratech or NPL and also made unilateral changes in the conditions of the loan granted to Patel Darah-Jhalawar Highway, without board approvals. SEBI says both had no concern for issues highlighted by former PFS chairman Deepak Amitabh ignored any communication by the IDs and shared no information about it with the board.
The forensic audit had indicated diversion and mis-utilisation of funds disbursed under the bridge loan to NPL, which raised clear suspicion of fraudulent activities in the account. The audit report noted that PFS did not disclose this to RBI. Even though, such non-disclosure or non-compliance may not have involved deliberate or malafide intent but was due to negligence, weak systems and lack of controls - a total management failure.
