LIC Housing Finance on July 17 issued a clarification regarding its preferential issue proposal saying there is no violation of the provisions of the Articles of Association (AoA).
Confirming the CNBC-TV18 newsbreak earlier this week, that the Securities and Exchange Board of India (SEBI) has asked exchanges to examine the preferential issue proposals of LIC Housing Finance, the company said it had received an email from BSE Limited and National Stock Exchange of India Limited on July 12.
The exchanges sought clarifications on compliance with the provisions of Articles of Association (AOA) of the company regarding the process arrived for the valuation at which the said equity shares are offered to LIC.
In response, LIC HFL said, “There is no violation of the provisions of AOA as the price has been duly determined in accordance with the relevant provisions of the AOA as well as the Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018."
The company also received another mail on July 16 from BSE and NSE asking for clarifications on why the valuation report of a registered valuer was not considered while determining the price of shares proposed to be issued on a preferential basis.
To this, LIC HFL reiterated that the price for the preferential allotment has been arrived at in compliance with the provisions of AoA, the Companies Act, and SEBI guidelines. “...as the Company being a Listed Company is not required to Obtain a Registered valuers Certificate as provided under Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014,” it added.
Moreover, the company confirmed that it is being examined by the exchanges. LIC HFL said the exchanges have directed that “in the interest of investors in the securities market, the voting in the EGM may be carried on. However, the results of the voting on Agenda item no. 1 may not be made public and the same shall be kept in a sealed cover pending the completion of examination.”
This is in reference to the preferential issue of 4,54,00,000 equity shares to Life Insurance Corporation of India (LIC) at the Extra Ordinary General Meeting (EGM) of the members of LIC HFL on July 19.
(Edited by : Kanishka Sarkar)
First Published: IST