PNB Housing settles Carlyle Group case

The markets regulator had initiated proceedings against the mortgage lender in June 2021 for alleged failure to obtain valuation reports for preferential sale of its shares to buy the firm Carlyle Group.

The High Powered Advisory Committee of SEBI had in May recommended settlement of the matter on payment of 72 lakhs, including 44 lakhs as legal cost. PNB Housing Finance along with 11 directors settled the matter related to the proposed open offer after jointly giving money to SEBI on June 15. Under the offer of the mortgage lender The Rs 4,000-crore deal with Carlyle Group, PNB Housing Finance, was to make it a preferential issue for investors led by the private equity firm. 390 per share.

The deal came under scrutiny after a proxy advisory firm, Stakeholders Empowerment Services, said the proposed investment was against the interests of shareholders of PNB Housing Finance and Punjab National Bank. The deal took place at a valuation below the book value and the shares were not valued by an independent agency.

SEBI said the shares were undervalued and an independent valuation should be done before allotment. Thereafter it stopped the EGM which was to consider the issue of shares.

The mortgage lender moved the Securities Appellate Tribunal (SAT) on whether SEBI has jurisdiction to restrain from holding the meeting. SEBI had approached the Supreme Court after SAT had given a split verdict in the matter in August last year.

On 16 October 2021, PNB Housing Finance informed SEBI via an email that it had informed the stock exchanges on 14 October 2021 that its board has decided not to proceed with the preferential issue. The apex court, on 20 October 2021, issued an order dismissing the appeal as infructuous.

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