In a fresh twist to the Rs 4000-crore capital deal, the PNB board wanted it to consider restructuring the deal following an independent valuation as suggested by the market regulator.
PNB Housing said it would rather wait for the Securities Appellate Tribunal (SAT) order.
The hearing before SAT, which was adjourned on July 5, is scheduled for July 12.
“The board of the company, by a majority resolution passed on July 6, 2021, decided that since the issue involved relates to interpretation of law and is sub-judice, before the Hon’ble Securities Appellate Tribunal (“SAT”), the Board will await the SAT’s order on this issue,” PNB Housing said in a regulatory filing Wednesday.
PNB board, after deliberating on the issue on July 3 on the basis of a legal opinion obtained from a law firm, told PNB Housing to “take cognizance of the directive issued by SEBI vide their letter dated June 18, 2021 and reconsider restructuring the contours of the deal/transaction of the capital raising in line with such SEBI directive”.
Interestingly, PNB chief executive SS Mallikarjuna Rao is a member of PNB Housing’s capital raising committee.
“What a slap on the government that the board of directors of PNB Housing Finance decides to go against the recommendation of the promoter’s board, which has government appointed directors in it,” a person who is closely following the issue said.
Sebi in its letter to PNB Housing on June 18 termed the deal “ultra vires” of Articles of Association and directed it to carry out a valuation of its business by an independent agency before seeking shareholders’ vote on the deal.
The company had moved to SAT against Sebi’s order. SAT, while allowing shareholders to vote on the matter among other things, barred PNB Housing from declaring the voting result on the capital raising.
Besides controversy over pricing of the deal, there were disputes on whether funds could have been raised through a rights issue, and whether capital-starved promoter PNB has given away control to buyout firm Carlyle.
The board of PNB Housing on May 31 approved placement of 82 million preferential equity shares and 20.5 million share warrants with Pluto Investments, a Carlyle Group company and Salisbury Investments, the family investment vehicle of former HDFC Bank MD Aditya Puri, and others such as General Atlantic Singapore Fund FII Pte Ltd and Alpha Investments V Pte Ltd. Carlyle led the infusion with 80% contribution. The issue price for the deal was Rs 390 per share, while the share price jumped to Rs 880 within a few days of the announcement.
Its share price closed Wednesday at Rs 686.10 on BSE.