Withdrawing from the Rs 4,000-crore Carlyle-led deal was a deliberate choice of PNB Housing Finance as the company wanted to refrain from the protracted legal battle and maintain focus on the lending business, said Managing Director and CEO Hardayal Prasad, reported PTI.
Last month, the company decided not to go further with the Rs 4,000-crore capital infusion deal led by Carlyle as it might give birth to a legal battle which will not be in the best interest of the company and the shareholders
The deal got its assent on May 31. But, soon after, embroiled in a controversy related to the valuation of the shares offered to shareholders. Consequently, the matter was stretched to the Securities Appellate Tribunal (SAT) after the intervention of markets regulator Sebi.
“If you look at it, there is nothing that we did wrong. We followed the policy of the Sebi, the LODR instructions, we tried to do everything. It was only a question of interpretation.
“The way we were looking at it, and the Sebi was looking at it, there was a little disconnect over there and that is why we took it to the Securities Appellate Tribunal (SAT) also,” Prasad told PTI in an interview.
He said that the SAT’s split decision demonstrates that it was merely a question of interpretation because one of the judges in the case backed the company’s position, repeating, “I don’t think we did anything wrong.”
Prasad also mentioned that only one of the judges, the presiding officer, passed the judgment in the company’s favour. “But, we are very clear that we don’t want any protracted legal battle. We want to concentrate on our work and go ahead.”
“I am not in that business, we are in the business of lending, in the business of financing. What is the point in remaining distracted by these kinds of things? So, we decided that okay they are the regulator and we decided to go ahead with the pull-back (from the deal),” Prasad said to PTI.
In August, SAT gave a split verdict after which Sebi had moved to the Supreme Court. However, in late October, the SC had dismissed Sebi’s appeal as it became pointless when PNB Housing Finance said it would pull out from the deal.
The company has filed an appeal to the Securities Appellate Tribunal regarding withdrawal from the case.
Prasad said the company requires the capital and it will look for easy to raise funds, be it through borrowings, qualified institutional placement (QIP), rights issues or preference issues.
“Whether we do it through borrowings or QIP, preferential issue, rights issue, any other things that we can do, we are keeping everything open and we will see to it and at the right time, we will approach the board to permit us to raise the money,” Prasad said.
“We remain engaged with everybody. See how we can move forward in terms of capital raising. We require to raise the capital, despite a solid capital adequacy ratio, and the gearing position.
“But, we would still like to raise capital to enable us to grow even faster than we are growing,” he added.
State-owned Punjab National Bank (PNB) is the company’s promoter having a 32.6 stake in the company.