Shares of PTC India Financial Services Ltd (PFS) declined as much as 19% on the BSE in Thursday’s deals in their worst intraday trade since May 2015. The negative reaction comes after three independent directors resigned over corporate governance issues and other matters in an unusual development.
The company informed in an exchange filing that it had received resignation letters from independent directors Kamlesh Shivji Vikamsey, Thomas Mathew and Santosh Nayar. In his resignation letter, Mathew said independent directors had flagged multiple times serious lapses in corporate governance and compliance.
“The stock is under selloff pressure after the reports of corporate governance issue. Those who have holding in the stock are advised to exit at any rebound as the stock is expected to continue making new lows in next few trade sessions,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.
Some of the issues pointed out included the appointment of a whole-time director, non-disclosure of a forensic audit report regarding a loan account, and unilateral changes in loan conditions without board approvals.
PFS said on Thursday it was in receipt of resignations from three independent directors mentioning ‘some reasons’ and the matter would be addressed at the board level.
“Stock has strong support at ₹18 and currently, it is trading in the range of ₹18 to ₹25. Those who have this stock in their portfolio are advised to maintain strict stop loss at ₹18 levels. And one should avoid taking any fresh position in this counter,” said Sumeet Bagadia, Executive Director at Choice Broking.
PFS, promoted by PTC India Ltd, is registered with the RBI as a Non-Banking Financial Company. The directors have also sent of their resignation letters to the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi) and Ministry of Corporate Affairs.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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