The central bank, which went into the allegations by directors who quit complaining that the management was not cooperating to put the house in order, is said to be concurring with the forensic audit conducted by the company, which found out violations, including evergreening of loans.
Singh has to respond this month.
Singh and parent PTC India’s acting chairman Rajib Mishra did not reply to separate emails seeking comments.
Responding to ET’s query on the RBI notice, the company reiterated that the forensic audit report has been independently examined by consultancy firm Ernst & Young, which opined that the forensic auditor’s observations have no financial impact and there is no indication of any suspected fraud.
“We have further taken an opinion of former chief justice of India who opined that forensic audit report doesn’t identify a single instance of ‘fraud or diversion of funds’ and not identify/quantify any ‘material impact’,” a PFS spokesperson said. “Our company is now functioning normal with focus on growth and performance. We have to inform you that none of the accounts mentioned in forensic audit report has been originated by Pawan Singh and not a single account sanctioned during his tenure as MD & CEO became an NPA account. All our NPA accounts are from legacy stress accounts.”
Three independent directors resigned between November 22 and December 2 last year amid allegations of misgovernance at the company. In his resignation letter, independent director Jayant Gokhale accused the management of creating hurdles against smooth working of the board while refusing to acknowledge any deficiency in the running of the business. “What finally convinced me to take the step of resigning was the persistent refusal of the management to cooperate with the conduct of the forensic audit and the ultimate conclusion drawn by management that the forensic audit report did not contain any significant findings whatsoever,” Gokhale said.
