SAT clears vote on PNB Housing deal with Carlyle

MUMBAI: The Securities Appellate Tribunal (SAT) on Monday allowed PNB Housing Finance (PNBHFL) to hold its extraordinary general meeting (EGM) on Tuesday, as part of the controversial Rs 4,000-crore investment proposal by PE major Carlyle Group and its associates in the mortgage lender. The SAT, however, has asked PNBHFL to not announce the result of the shareholders’ voting on the proposed deal, which is the most important part of the EGM.
Earlier on Monday, PNBHFL had informed the exchanges that it was moving SAT after Sebi last week asked the company to not proceed with the preferential allotment to Carlyle and associates as the process did not confirm to mortgage lender’s articles of association (AoA). Sebi had also asked PNBHFL to appoint a new valuer for its shares and its board to consider the valuation given by that entity to finalise the price of the shares for allotment to Carlyle.
While dealing with the matter, the two-member bench at SAT said that since electronic voting had already started, it was not fair to stay the voting process that dealt with allotment of preference shares at the EGM, scheduled on June 22. The tribunal members said that since the dispute related to interpretation of some provisions of Sebi’s Issue of Capital and Disclosure Requirements Regulations and Companies Act relating to the AoA of the company, the EGM could go ahead.
The SAT also asked Sebi to file its reply by June 26. Sebi’s regulatory directive had come after SES, an institutional shareholders advisory firm, pointed out on June 8 that the allotment of shares to the PE major and its associates was ultra vires of PNBHFL’s AoA. SES had also said that the way the whole deal was structured, it was skewed against minority shareholders, currently holding about 15% in the mortgage lender.

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