PNB Housing goes to SAT against market regulator's order on share transfer

SEBI has asked the company not to act on preferential allotment until an independent valuation of shares was done.

PNB Housing Finance (PNB HFC) has appealed against an order by India’s capital market regulator asking it to hold a proposal to get shareholders nod for issuing equity shares and warrants on preferential basis to a clutch of investors led by the Carlyle Group.

The company told BSE it has filed an appeal before the Securities Appellate Tribunal (SAT) against the letter issued by the Securities and Exchange Board of India (SEBI) on June 18. Its stock was down five per cent at Rs 702.4 per share on BSE.

SEBI had last week asked the company not to act on agenda (for preferential allotment) until an independent valuation of shares was done. 

The housing finance firm was planning to issue shares and warrants on a preferential basis to Carlyle, a private equity firm, and associates. The clique was reported to be investing Rs 4,000 crore to acquire a controlling stake of over 50 per cent in the Delhi-based mortgage lender.

The copany is to hold an extraordinary general meeting of shareholders on June 22 to consider many agenda items including the preferential allotment (shares and warrants). The price of each share and convertible warrant is Rs 390.

Sebi had said the resolution about the issue of securities and related matters was “ultra-vires” of the Articles of Association (AoA). The resolution will not be acted upon until the company does the valuation of shares (for preferential allotment) by an independent, registered valuer.

PNB HFC, in a late Saturday night filing, with the BSE said the company had acted in compliance with the laws, including pricing regulations prescribed by Sebi and the AoA. Such preferential allotment is in the best interests of the company, its shareholders, and all relevant stakeholders. The company is evaluating further steps in this regard.