PTC India Financial Services plunges 19%; here's why

New Delhi: Shares of PTC India Financial Services tanked more than 19 per cent during early trade on Thursday following the resignation of three independent directors from the company.

In an unusual development, all three independent directors on the board of PTC India Financial Services (PFS) on Wednesday resigned over corporate governance issues and other matters.

Following the update, shares of PFS tanked over 19 per cent to Rs 20.65 before recovering marginally to Rs 21.95 at Rs 9.30 am. The scrip settled at Rs 25.65 on Wednesday.

BSE benchmark and barometer Sensex was trading at 59,860.32, 238.5 or 0.40 per cent lower at the time of writing this report.

The three independent directors – Kamlesh Shivji Viakmsey, Thomas Mathew T and Santosh B Nayar -- have flagged serious concerns on conduct on the management of the PFS India led by managing director and CEO Pawan Singh.

In their resignations, the independent directors have alleged that actions of Singh were in violation of his powers. The independent directors have pointed to a unilateral change in conditions of a Rs 150 crore highway loan by the company.

They have also questioned lack of action on part of PTC India, which holds 65 per cent in the NBFC, which is expected to have debt close to Rs 11,000 crore.

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

The independent directors alleged that Singh unilaterally decided to put on hold the company board’s decision to appoint Ratnesh as PFS director finance and chief financial officer.

In recent memory, it is possibly the first instance where all the independent directors of a company have resigned enmasse. The company has submitted copies of the resignation letters to the stock exchanges.

Shares of PTC India Financial Services have underperformed BSE Sensex in the last one year as the scrip has added only 13 per cent during the period, compared to a 22 per cent rise in benchmark index.