The securities appellate tribunal (SAT) has substantially reduced the penalties to ₹3 lakh from ₹25 lakh imposed on Dr Pawan Singh, former managing director and chief executive officer (MD&CEO) of PTC India Financial Services Ltd (PFS), ruling that most corporate governance allegations levelled against him were not supported by evidence. The Tribunal also criticised the Securities and Exchange Board of India (SEBI) for holding Dr Singh solely accountable for all issues within the company.
In a strong-worded order last week, the SAT bench of justice PS Dinesh Kumar (presiding officer), Meera Swarup (technical member), and Dr Dheeraj Bhatnagar (technical member) says, "...we hold that, except for one main issue and two sub-issues, other findings against Dr Singh (the appellant) have not been conclusively proved. The respondent (SEBI) has considered the appellant to be the Company as well as the management and alleged that he was solely responsible with all that went wrong in the Company. The respondent did not charge the Company and the findings indicate that in the eyes of the respondent, the appellant, as the MD&CEO was single–handedly running the Company and responsible for all that happened in the company from ensuring that correspondence reaches the right person to deciding on papers to be put up to auditors, committee of the board and the board. The impugned order frequently considers the 'Company' and the 'management' as a synonym to the appellant."
"In our view, the entire issue was at the most a corporate battle in which such interference by the regulator was not called for. It is inconceivable that in a Company wherein major Maharatna public sector units (PSUs) are shareholders, one single individual could run amok. This also brings the questions as to the role of the nominee directors and the independent directors. The regulator has admittedly not made any inquiries as to their conduct," it added.
The case began after three independent directors (IDs) of PFS resigned in January 2022, raising concerns about corporate governance and leaving the board non-functional. This triggered regulatory scrutiny. SEBI later issued a show-cause notice (SCN) and, in June 2024, barred Dr Singh from holding key managerial positions in listed entities for two years while also imposing a penalty of ₹25 lakh.
Dr Singh appealed the order through his legal team led by advocates PR Ramesh and Joby Mathew, supported by Aditya Joby, Shefali Shankar and Pranav Kethineni of Joby Mathew & Associates.
SEBI had accused Dr Singh of violations across six areas, including allegedly preventing a newly appointed director from joining, delaying the presentation of a forensic audit report, overlooking governance concerns raised by the former chairman, altering loan terms without approval, withholding key information from IDs and obstructing subsequent forensic inquiries.
After reviewing the material, the three-member SAT bench found that most charges did not stand scrutiny.
SAT noted that the formalities for joining as a director for Ratnesh were handled by the human resources (HR) department of PTC India and Dr Singh had no authority in the process. The board had delegated such functions to the nomination and remuneration committee and the chairman.
The Tribunal also observed that the changes to loan terms for the Patel Darah–Jhalawar Highway project were carried out by the legal team and consortium lenders, without Dr Singh’s involvement. On the allegation that correspondence had not reached the chairman, SAT termed it ‘trivial’, noting that Dr Singh could not be held responsible for mail delivery to a non-executive chairman without a fixed office.
On claims that IDs were denied access to legal counsel, SAT pointed out that only eight days elapsed before they appointed their own lawyer, whose fees were later paid by the Company.
SAT upheld only three findings against Dr Singh. The first was a two-year delay in presenting the 2018 forensic audit of the loan to NSL Nagapatnam Power and Infratech Pvt Ltd (NPL) to the board. However, the bench emphasised that the delay was not deliberate, and that a committee of IDs had already concluded it resulted from weak internal controls rather than intentional wrongdoing.
The Tribunal also says the disclosure of a 2022 forensic audit report to stock exchanges could have been handled more appropriately, although it noted that the disclosure had indeed been made. The final upheld charge concerned a one-day delay in disclosing the resignation of an ID, a responsibility typically handled by the Company secretary. SAT held Dr Singh marginally accountable since such filings require his approval.
During hearings on 21 November 2024, advocate Joby Mathew argued that many issues cited by SEBI related to board-level decisions or departmental responsibilities outside Dr Singh’s remit. The team also submitted committee findings and internal reports that had exonerated Dr Singh of mala fide intent, stressing that key HR functions were managed by the parent company, PTC India.
SAT delivered strong criticism of the regulator, stating that SEBI had effectively treated Dr Singh as ‘the Company as well as the management’, and assumed he was solely responsible for ‘all that went wrong’.
The Tribunal questioned how one individual could be held answerable for the operations of a company where several public sector undertakings hold significant shareholding. It also highlighted that SEBI had not examined the conduct of nominee directors or other independent directors.
The Tribunal further noted a striking contradiction: only three months before their resignations, the same IDs had rated Dr Singh’s performance in sharing timely information with the board as ‘excellent’ and had praised his leadership during a difficult period. SAT remarked that the situation appeared to be a ‘corporate battle’ and that such regulatory intervention ‘was not called for’.
Based on its findings, SAT reduced the two-year debarment to the period already elapsed until 5 December 2025, effectively making Dr Singh immediately eligible to serve on the boards of listed companies. The penalty was cut from ₹25 lakh to ₹3 lakh — an 88% reduction.
Dr Singh, who has served as MD&CEO of PFS since October 2018 and previously worked as its director for finance and chief financial officer (CFO), receives significant relief through this ruling.
SAT’s decision underscores the importance of proportional regulatory action and the need to distinguish individual responsibility from collective governance failures, especially in companies with substantial public sector oversight.
