Bengaluru/Mumbai, Feb. 20 -- Within days of AGS Transact Technologies Ltd acknowledging that a cash crunch had forced it to default on bank loans, statutory payments, and staff salaries, all four independent directors on its board resigned in quick succession.

This caught the attention of proxy advisory firms, who are questioning the overall role of independent directors and if they could have intervened to limit AGS' cash crisis, which impacted cash dispensers of some of India's top domestic banks.

AGS, India's second-largest manager of ATMs, had a total board strength of eight directors before the latest resignations. It currently has three executive directors and one non-independent non-executive director.

"This raises two issues," ...