Rating agency ICRA has placed the ratings of PTC India Financial Services Ltd (PFS) under surveillance, negatively impacting the resignation of three of the company’s independent directors.
Such events (resignations) may affect business operations and investor and lender confidence in the company in the short to medium term. ICRA said in a statement that the changes could also affect the company’s ongoing asset quality-related resolutions. Bonds and long-term bank financing are rated ‘A+’, while short-term bank financing and commercial paper are rated ‘A1+’.
Three directors – Kamlesh Shivji Vikamsey, Thomas Mathew T and Santosh B Nayar – resigned on 19 January 2022 due to corporate governance lapses. PFS refuted the allegations and said it had been adhering to best corporate governance practices under the guidance of its promoters (PTC India Ltd), regulators and the Indian government.
ICRA said it favourably noted that the liquidity position of PFS is now adequate with liquidity on the balance sheet of Rs 4.1 crore against repayments of Rs 400 crore by March 2022.
ICRA will continue to monitor developments. Appropriate rating action will be taken when there is more clarity from the new board, top-level findings, implications for incremental funding and business growth prospects.
Last week, another rating agency, CARE, said it would continue to monitor the results of an internal investigation and any possible impact of the resignation on PFS’ financial performance and its liability franchise.
The Securities and Exchange Board of India (Sebi) has asked PFS to submit an Action Report (ATR) within four weeks on corporate governance matters and issues raised by resigning directors. The head of the capital markets regulator instructed companies to address these issues before holding a board meeting.
Complete News Source : Business Standard
