NEW DELHI, July 20: LIC Housing Finance has approached Securities Appellate Tribunal (SAT) with regard to company’s proposal of allotting over 4.5 crore preferential shares to its parent company LIC.
The company was asked to explain how it arrived at the decision to fix the issue price for the preference shares at Rs 514.25 apiece for allotting 4,54,00,000 equity shares to LIC.
On Saturday, LIC Housing Finance had informed that stock exchanges — BSE and NSE — were examining the proposed Rs 2,334.70 crore capital infusion into the company by giving additional stake to LIC through issue of preference shares.
Stock exchanges had asked the company regarding compliance with the provisions of the Articles of Association (AOA) pertaining to the methodology for computation of price of preferential issue of equity shares to LIC.
LIC Housing Finance told BSE and NSE that it was in compliance with relevant provisions under AOA for deciding the issue price.
The company at its extraordinary general meeting (EGM) on Monday (July 19, 2021) sought to get shareholders’ approval for issuing preference issue of shares to the promoter.
Chairman M R Kumar, informed at the meeting that “wherever in the notice the issue price per equity share has been mentioned as Rs 514.25/-, the same shall bread as Rs 514.43 per share and correspondingly the issue size shall be read as Rs 2,335.51 crore (approx) for issue of up to 4,54,00,000 equity shares on preferential basis to the promoter, name LIC of India,” LIC Housing Finance said in a regulatory filing on Monday.
Even as the stock exchanges had allowed the company to go ahead with its EGM, it restricted the company from declaring the voting results for the preference share issuance.
The results of the e-voting process will not be made public and the same will be kept in a sealed cover and will be disclosed in line with the directions received from the stock exchanges, the company said.
“It was also informed to the members that a case of preferential allotment is pending before the Securities Appellate Tribunal (SAT) and the verdict of SAT in the matter is expected soon, which may put these issues at rest,” it added.
Chairman Kumar also explained to members the need and rationale for this confidence capital raising and how it is important in this COVID-19 scenario, it said further.
The LIC Housing Finance case is akin to the PNB Housing Finance, wherein, its proposed Rs 4,000 crore capital infusion by allotting preference shares to US-based Carlyle Group and a clutch of other investors, has hit a roadblock.
Sebi had questioned PNB Housing Finance’s rationale behind the fixing of the issue price among other.
Following this, the housing finance subsidiary of Punjab National Bank (PNB) reached SAT in June against Sebi. The case is being contested in the SAT. (PTI)
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