KPMG asked PFS to bring in executives from pvt sector
Premium- The consulting firm had suggested in January a revamp of the hiring process at the company
NEW DELHI : KPMG, tasked with surveying corporate governance issues at controversy-hit PTC India Financial Services (PFS), suggested in January a revamp of the hiring process at one of India’s top power sector lenders, said two people aware of the development.
The consulting firm called for hiring executives from the private sector for management positions at the subsidiary of the country’s largest electricity trader PTC India Ltd.
There were “significant gaps in the hiring and selection process of the director finance and director operations right from the posting of job application", KPMG India Services LLP said in its report.
This, it said, is at the heart of the tussle between the senior leadership and independent directors who recently exited from the company.
The KPMG report, seen by Mint, reviewed the hiring process in terms of effectiveness, transparency and fairness, regulatory compliance and whether it aligned with prevailing industry practices. The report suggested that the company should start the hiring process anew.
The report also said the hiring process should consider the requirements of the organization and expectations from critical senior managerial positions. The nomination and remuneration committee needs to ensure that a fair, open, and transparent process, and that arms length needs to be maintained between the parent PTC India Ltd and PFS to ensure that there is no influence in the hiring process, it said.
The hiring of the directors was a bone of contention within the leadership of PFS and the board, from which three independent directors exited in January. Rakesh Kacker, a former bureaucrat, also stepped down as an independent director from the PTC India board, citing corporate misgovernance.
The KPMG report was commissioned by PTC India given the strategic importance of its non-banking finance arm PFS. PTC India is a public-private initiative with state-run NTPC Ltd, Power Grid Corp. of India Ltd, NHPC Ltd, and Power Finance Corp Ltd as promoters with a total stake of 16.20%.
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“The KPMG report was commissioned by PTC India as per our corporate governance protocol. The findings by KPMG are as per their standards and processes," a spokesperson for PTC India said in an emailed response.
PFS did not respond to an e-mail sent on Friday but an official said that the report was commissioned by PTC India, who were best suited to respond about the exercise. KPMG did not respond to an email sent on Friday.
Applications were invited for the positions of director finance and director operations last July with a 15-day window for application from within PTC, its subsidiaries, and promotor companies. However, these positions remain vacant, said a person familiar with the development. Positions to be filled in must also be shared with recruitment consultants to access a larger talent pool and the position must be open for 30-45 days to ensure suitable candidates apply, the KPMG report said. Relaxations should be given to internal candidates to promote a culture of performance driven progression, the report said.
gireesh.p@livemint.com
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