Ptc india limited: the corporate governance conundrum

Abstract

PTC India Ltd. (formerly known as Power Trading Corporation of India Limited) is the largest power trading company in India, holding nearly half of the market share as of 2022. In December 2022, four independent directors of PTC India resigned, accusing the company and its subsidiary, PTC India Financial Services (PFS), of serious lapses in corporate governance. PTC India holds 65% of the stake in PFS. Earlier in January 2022, three independent directors of PFS had also resigned, accusing the company of evergreening of loans, proposing ineligible loans, and changing the disbursement conditions without the approval of the board. Since the issue came to light, investors of PTC India have been selling their stakes, resulting in a drop in stock prices of more than 30% by December 2022. It severely impacted the reputation of PTC India and the government, which indirectly owns around 16% of PTC India's stake through several state-owned entities. In December 2022, the group of promoter PSUs were contemplating whether to sell its stake in PTC India.