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India’s market regulator has issued legal notices to government owned PTC India and its financial services unit PTC India Financial Services (PFS), demanding explanations of alleged corporate governance lapses, two people familiar with the matter said.
PTC India, a power trading company, and PTC India Financial Services, a finance company, have been given 21 days to reply to the show cause notice that requires them to explain before the market regulator why action should not be taken against them, the sources said.
Speaking on condition of anonymity as they are not allowed to speak to the media, they said Investigations by Securities and Exchange Board of India (SEBI) had found preliminary evidence of alleged violations of governance and listing norms.
Officials in PTC India and PFS did not immediately respond to messages and emailed queries sent by Reuters seeking comments. SEBI did not respond to an email sent by Reuters.
The SEBI investigation followed allegations levelled by three independent directors of PTC India Financial Services in January 2022.
The three directors resigned from the board citing “instances of serious lapses in corporate governance and that the company failed to act on concerns raised by them” in a letter available via stock exchange disclosures.
Following the company’s response to the show cause notice, SEBI will pass a final order, with possible consequences ranging from monetary penalties to a ban from capital markets
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