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PNB Housing Finance to hold EGM today amid concerns over Carlyle deal
PNB Housing Finance moved the tribunal against Sebi's direction on Monday morning.
PNB Housing Finance will on Tuesday hold its shareholders' meeting to consider the proposed ₹4,000 crore investment by private equity firm Carlyle Group Inc and others in the mortgage firm. However, results of the shareholders' voting will not be disclosed till further directions from the Securities Appellate Tribunal (SAT), which on Monday allowed Punjab National Bank Housing Finance Ltd to go ahead with the shareholders' meeting.
The SAT ruling came hours after PNB Housing Finance informed stock exchanges that it has appealed against the Securities and Exchange Board of India's (Sebi's) direction on June 18. Sebi, the capital market regulator, ordered PNB Housing Finance to stop its proposed fund-raising plan by a group of investors led by Carlyle. According to a stock exchange filing on Saturday, Sebi said PNB Housing’s plan to issue securities by way of preferential allotment on a private placement basis shouldn’t be carried out until it undertakes the valuation of shares from an independent registered valuer.
Sebi not only restrained PNB Housing Finance from going ahead with voting on the proposal but also directed that the matter should be placed afresh before the company's board of directors and then a decision be taken on the basis of the independent valuation.
PNB Housing Finance moved the tribunal against Sebi's direction on Monday morning. A two-member bench of the tribunal, which took up the matter on an urgent basis, said that as "electronic voting has already commenced it would not be fair to stay the consideration of agenda no. 1 (issuance of preference shares) of the EGM notice dated May 31, 2021, which is going to be held on June 22, 2021."
The bench of justice Tarun Agarwala and justice MT Joshi said that no factual dispute exists and only an interpretation of the provisions of the Issue of Capital and Disclosure Requirements (ICDR) Regulations and Companies Act read with Articles of Association is required to be considered. The tribunal also said in its five-page order the EGM would be held on June 22 and that the members would consider agenda no. 1. "However, the results would not be declared and would be kept in a sealed cover. In this regard, the company would issue specific directions to NSDL who is in charge of the electronic voting not to reveal the results and keep the same in a sealed cover till further orders of this tribunal," the order said.
Sebi has been asked to file a reply to the plea on the matter by June 26.
PNB Housing Finance, under the proposed deal, will allot securities worth ₹4,000 crore to Carlyle Group and other entities, a deal that will eventually result in the private equity major becoming a major shareholder of the company. The proposed transaction has come under the lens of Sebi and the Reserve Bank of India (RBI) after concerns were raised in certain quarters, including by a proxy advisory firm.
On Monday, shares of PNB Housing Finance declined 5 per cent to close at ₹702.40 apiece, its lower circuit limit, on BSE. It fell 4.99 per cent on NSE to end the day at ₹700.95.
(With agency inputs)
