SEBI Vs PNB Housing Finance: Supreme Court To Wait For Appointment At SAT

The Supreme Court of India has adjourned the hearing in the PNB Housing Finance Ltd. case, indicating that it will wait for fresh appointments at the Securities Appellate Tribunal.

Earlier this month, SAT had given a split verdict on the Securities and Exchange Board of India's objection to the preferential issue allotment pricing by the housing financier. The matter at the tribunal was heard by a two-judge bench of presiding officer Justice Tarun Agarwala and judicial member Justice MT Joshi. Since March 31, the technical member position at SAT has been vacant.

Also Read: SEBI, SAT Spar Over Technical Member Vacancy

The case landed at the top court after the market regulator appealed against the SAT ruling. On Thursday, the apex court bench presided by Justice L Nageswara Rao said it would wait for the appointment of another member at SAT who can cast the deciding vote on the split verdict.

Until then, voting results on the preferential issue resolution will remain confidential, the apex court said.

On May 31, PNB Housing Finance announced its board had approved raising Rs 4,000 crore via a preferential allotment of shares to select shareholders led by Carlyle Group.

The company's board had approved a price of Rs 390 per share determined as per SEBI's issue of capital and disclosure requirements regulations. But the market regulator directed the company to undertake a valuation of the shares as per its Articles of Association — that mandate a registered valuer's report for such fundraising.

PNB Housing Finance approached SAT for relief. Justice Agarwala had ruled in favour of the housing financier saying SEBI's direction to the company "was patently illegal and cannot be sustained". But Justice Joshi had found merit in SEBI's arguments on grounds of investor interest.

In separate proceedings, the Supreme Court is monitoring appointments at tribunals across the country. The case related to vacancies in tribunals is likely to come up for hearing on Monday next week.