PNB Housing Finance Vs SEBI: A Split Verdict By Securities Appellate Tribunal

The Securities Appellate Tribunal gave a split verdict in the case of PNB Housing Finance Ltd. The matter was heard by a two-judge bench of Presiding Officer Justice Tarun Agarwala and Judicial Member Justice MT Joshi.

Justice Agarwala ruled in favour of the housing finance company, while Justice Joshi agreed with the market regulator's view, a lawyer involved in the matter told BloombergQuint on the condition of anonymity.

The detailed order of SAT is awaited.

On May 31, the housing financier had announced capital-raising via a preferential issue to certain entities belonging to the Carlyle Group, General Atlantic, Ares SSG and Salisbury Investments.

The controversy arose when the Securities and Exchange Board of India wrote to the company raising objections to pricing of the preferential allotment issue. The company’s board had arrived at a price of Rs 390 per share determined as per SEBI’s Issue of Capital and Disclosure Requirements Regulations.

But the market regulator directed PNB Housing Finance to undertake the valuation of shares as per the provision in its articles of association that require a registered valuer's report on valuation. This prompted PNB Housing Finance to approach SAT for relief, which had allowed the company to go ahead with the shareholder meeting but not disclose the results.

(This is a developing story.)