Image Credit: twitter.com/pnbhousingfinan
Mortgage lender PNB Housing Finance Limited has decided to file an appeal at the Securities Appellate Tribunal challenging SEBI’s decision to put a hold on its proposed deal of about Rs 4,000 crore with a consortium of equity investors led by the Carlyle Group. The deal had come under market regulator SEBI’s scanner after a proxy advisory firm raised questions on the process of valuation followed by PNB Housing.
The advisory firm named Stakeholders Empowerment Services (SES) alleged that PNB was ceding control over PNB Housing without getting the justified compensation and had advised minority shareholders of the housing finance firm to vote against the proposed preferential allotment of shares to the Carlyle-led group of investors.
Following the allegations, SEBI put a pause on the deal and wrote a letter to PNB Housing last week saying that the notice the lender had issued for the Extraordinary General Meeting(EGM) was inconsistent with its Article of Association (AOA). The regulator instructed PNB Housing to undertake a valuation of shares from an independent valuer before proceeding with the EGM.
It may be recalled that PNB Housing Finance Limited had earlier called an EGM of its shareholders on June 22 to approve the preferential allotment of shares to a consortium of equity investors which includes The Carlyle Group, General Atlantic, Ares SSG and former HDFC Bank CEO Aditya Puri. The deal, which has now become highly controversial, would have bought Rs4,000 crore for the public sector lender.