The shares of PNB Housing Finance were locked in the 5 percent lower circuit at Rs 702.40 per share on Monday after the Securities and Exchange Board of India (SEBI) directed the company to halt its proposed Rs 4,000 crore deal with Carlyle Group.
The capital and commodity market regulator said that the company’s preferential share allotment was “ultra-vires” of the articles of association (AOA) of the firm.
The decision regarding allotment by issuing equity shares and convertible warrants was taken on May 31 this year at an Extraordinary General Meeting (EGM) of shareholders.
The regulator has asked the PNB Housing Finance to not act upon the allotment until the company undertakes the valuation of shares.
“…the notice given on May 31 for Extraordinary General Meeting is “ultra-vires" of Article of Association (AOA) and shall not be acted upon until the company undertakes the valuation of shares as prescribed under 19(2) of AOA, for purpose of preferential allotment, from an independent registered valuer as per the provisions of applicable laws. The said report shall be considered by the Company’s Board while deciding on the preferential issue of shares and warrants,” the SEBI order said.
However, PNB Housing Finance has filed an appeal before the Securities Appellate Tribunal against the letter issued by the SEBI.
The stock has rallied over 33 percent this month after the announcement of the deal with Carlyle Group on May 31.
First Published: IST