PNB Housing Finance and its directors have settled a case with market regulator Sebi for violations pertaining to the preferential issuance of shares to the Carlyle Group. The deal was called off subsequently.
The housing finance company along with the 12 individuals, who were directors of the company as on May 31, 2021, have jointly paid Rs 72.7 lakh towards the settlement. This includes Rs 44.2 lakh as legal costs, the Sebi said in an order on Tuesday.
Sebi had issued a notice to the applicants alleging that they had failed to obtain a registered valuer’s report in accordance with Article 19(2) of the Articles of Association (AoA) of the company. The applicants had allegedly not accounted for control premium in the pricing of the preferential issue and failed to make adequate and timely disclosure to the stock exchanges of material information.
In response to Sebi’s allegations, the applicants had filed for settlement with the regulator.
PNB Housing Finance had last year approved the preferential issue of shares and warrants to entities belonging to the Carlyle Group without undertaking the valuation of shares as provided under Article 19(2) of the AoA of the company.
Sebi had objected to this following which the company approached the Securities Appellate Tribunal for a redressal. SAT announced a split verdict on the matter after which Sebi filed an appeal before the Supreme Court challenging the order of the Presiding Member of the SAT.
In October, however, the company decided not to proceed with the preferential issue, following which the SC dismissed Sebi’s appeal. The company also filed a miscellaneous application before SAT on October 19 requesting for permission to withdraw their appeal.