Securities and Exchange Board of India (SEBI) has directed PNB Housing Finance to stop the proposed Rs 4,000 crore deal with Carlyle Group. Ever since the news of this deal came, there was a tremendous rise in the shares of PNB Housing Finance.
Shareholders’ vote to resolve the deal was to be held on June 22. Earlier, the market regulator SEBI has said that the notice issued for calling the Extraordinary General Meeting on May 31 is against the rules of the Articles of Association of the company. Until and unless the company does the valuation of the shares, it cannot be acted upon.
SEBI has directed the company to complete the process of valuation under relevant legal provisions. Whereas PNB Housing Finance has said in its statement that the company and its Board of Directors have taken cognizance of SEBI’s letter, they are confident that the company has complied with all the rules laid down in SEBI and the Articles of Association of the company.
Actually, a few days ago a proxy advisory firm had raised questions on this deal. This proxy advisory firm Stakeholders Empowerment Services criticized the deal, saying that the deal was against the interests of shareholders of both PNB Housing Finance and Punjab National Bank.
The firm has alleged that the deal has been valued at less than the book value of the company. Stakeholders Empowerment Services (SES) believes that this deal has not been done according to the company’s AoA. PNB Housing Finance said that it has received a letter from SEBI in this regard on June 18.
It is worth noting that this deal had given wings to the shares of PNB Housing Finance. Before the deal, on May 28, the price of a share was Rs 438, after that the news of the deal came and the stock was in the upper circuit for several consecutive days, and the stock rose above Rs 900 on 7 June.
Let us tell you, on May 31, a group of investors led by private equity firm Carlyle Group had announced an investment of Rs 4,000 crore in PNB Housing.
