Private Equity

Private Equity Fund Investments

Carlyle investment in PNB Housing: SAT gives split ruling

Mint  

PNB Housing Finance Ltd's plans to raise INR 4,000 crore from a consortium of investors led by private equity firm Carlyle will continue to be in limbo as the mortgage lender's appeal of a Sebi order halting the transaction resulted in a split verdict at the Securities Appellate Tribunal (SAT). While Justice Tarun Agarwala ruled in favour of PNB Housing Finance, Justice MT Joshi gave a judgement in favour of Sebi. In view of the difference of opinion between the members of the bench, the interim order dated June 21, 2021 will continue till further orders. The June 21 order allowed PNB Housing to seek shareholders' approval for the deal at an extraordinary general meeting (EGM) but ordered the results of the vote to be kept in a sealed cover until further orders. Given that neither of the parties was able to secure a favourable decision at SAT, they can now approach the Supreme Court to resolve the impasse. The tussle between Sebi and PNB Housing began in June when the latter announced a preferential sale of shares worth INR 3,200 crore and warrants worth INR 800 crore to a set of investors led by Carlyle, an existing investor in the mortgage lender. Proxy adviser Stakeholders Empowerment Services (SES) criticized the deal as “unfair" to public shareholders and a violation of the company's Articles of Association pertaining to the valuation. Sebi then asked PNB Housing to put the deal on hold, prompting the home financier to move SAT.