Courtesy-Business standard
Last week, the decision to issue shares worth ₹4,000 crores to investors led by The Carlyle Group, a US private equity giant, was made by a majority of the board members of PNB Housing Finance Limited. However, this raised questions of corporate governance and conflict of interest.
Aditya Puri, who has joined Carlyle as a senior advisor will also be issued shares. He worked as a former HDFC MD before joining the group. The stake holding of Punjab and National Bank could reduce in its housing finance subsidiary to below 26 per cent which is in a contradiction to its stated public commitment.
Voluntary retirement from SBI Cards was taken by Hardayal Prasad from the position of MD and CEO. Within a month he joined PNB Housing as its MD and CEO. Carlyle had offered 9.3 crore shares in the SBI Card’s ₹9,500 core public issue for which Prasad was incharge, Carlyle had raised over ₹7,000 crores through its offer.
From the GE Capital in December 2017 Carlyle had acquired a 26 per cent stake in SBI Card for around ₹2,000 crores and crafted a huge profit in less than three years.
Prasad was hired by PNB Housing at a fixed salary of ₹1.91 crores and a performance link variable pay of ₹1.4 crores, at the time while his remuneration in SBI Cards was ₹66 lakh for 2018-19. For the first year, he was decided to be paid a minimum of ₹1.12 crore of a variable by the board along with 5.5 lakh ESOP at the then market price. On the other front, Sunil Kaul and Kapil Modi are two Carlyle employees as well as nominee directors by the firm having a 32 per cent stake in the company.