PNB Housing Finance vs Sebi: Mystery of the Articles of Association

The rigmarole over the valuation of a preferential share allotment has raised a confusing question on the status of a company's Articles of Association

It was a seemingly innocuous provision in the Articles of Association (AoA) of PNB Housing Finance (PNB HF) that has posed several larger questions around the need for amendments in preferential offer regulations. In the first place, that provision was not supposed to be part of the listed company’s AoA. But the fact remains that it was bypassed — whether conveniently ignored, or a case of just plain oversight, the jury is out on that one — when the company was arriving at the price for its proposed preferential issue.

The controversy concerns PNB HF’s challenge before the Securities Appellate