PNB Housing Finance shareholders approve appointments, reappointments of directors
Among various passed resolutions were re-appointments of independent directors (IDs) Chandrasekaran Ramakrishnan and Nilesh S Vikamsey — whose re-induction was red flagged by a proxy advisory firm earlier this month.
The extraordinary general meeting (EGM) of the company that took place on Tuesday (June 22) was called to seek shareholders’ approval for allotting preference shares to US based Carlyle group led investment of Rs 4,000 crore in the company.
As the Rs 4,000 crore Carlyle led deal has mired into a controversy and the matter has now reached the Securities Appellate Tribunal (SAT), the company has been restrained to announce the voting results about the preference issue pending disposal of the matter next month.
The deal was announced on May 31, subject to shareholders’ and other regulatory approvals.
“The resolutions pursuant to item number 3 to 10 of EGM notice dated May 31, 2021 have been passed with requisite majority,” PNB Housing Finance said in a regulatory filing on Friday.
The item numbers 3 to 10 (resolutions) involved appointment of Prasad, Neeraj Madan Vyas as non-executive non independent director, Sudarshan Sen as independent director, Kapil Modi as non-executive nominee director and Gita Nayyar as independent director, as well as re-appointments of Vikamsey and Chandrasekaran–all of which were passed with more than 99 per cent votes cast in favour of the resolutions.
Prasad, a veteran banker with a long stint with SBI before joining PNB Housing Finance, was appointed for a period of three years with effect from August 10, 2020 up to August 9, 2023.
Further, the company said the results for item number 1 of EGM (related to preference shares issuance) will be declared as per order dated June 21, 2021 of Securities Appellate Tribunal.
Also, the results of the item number 2 of the EGM (related to changes in Articles of Association) is related to item number 1 and in the spirit of order of SAT, the company will declare the results of item number 2 along with item number 1, PNB Housing Finance said.
The company had moved the SAT on Monday (June 21) post a SEBI order, directing it to not to go ahead with the proposed preference issue until valuation of shares was done by an independent registered valuer.
SEBI said the proposed deal was ultra-vires (beyond legal power/authority) of the Articles of Association.
The company, however, on its part has contended that the price fixed for the issue is in accordance with the applicable SEBI norms. The board of PNB Housing Finance okayed the issue price for the deal at Rs 390 apiece.
A proxy advisory firm Stakeholders Empowerment Services (SES) earlier this month raised concerns about the proposed deal. SES said it was against the interest of the public shareholders as well as the promoter state-run bank PNB.
SES also red flagged re-appointment of two Vikamsey and Ramakrishnan, giving a rationale that their re-appointment was not in accordance with law.
The shareholders of company on June 22 EGM passed the resolution about Ramakrishan’s re-appointment with 99.81 per cent votes cast in his favour and 99.58 per cent in favour of Vikamsey.
Both of them have been re-appointed on the board of PNB Housing Finance as independent directors (IDs) for a second term of five years.
The first five-year tenure of Ramakrishnan and Vikamsey as IDs ended on October 6, 2020 and April 21, 2021, respectively. Under the Companies Act, a person cannot be re-appointed as an ID unless a special resolution is passed by shareholders in a general meeting.
SES report objected to their re-appointment by board saying in the current instance, as their tenure ended in October and April, they ceased to be the IDs in PNB Housing Finance board.
Such an approval should have been taken on or before October 6, 2020 and April 21, 2021, the proxy advisory said in its report released earlier this month, SES had said.
As per SES report, 7 out of 10 companies where Vikamsey is associated as director, Carlyle was/is an investor. This also included
where Carlyle had attempted to acquire a stake.
“While, it could be a pure coincidence and may not be any compliance issue, however, coincidence is there,” the report had said about Vikamsey.
Even as SES said there was no concern over the merit of Chandrasekaran and Vikamsey’s re-appointment, it was not in accordance with law.
SAT will give its final order on the matter related to preference shares on July 5.
PNB Housing Finance stock closed 4.98 per cent higher at Rs 699.85 apiece on the BSE.
The current stock price of the company is trading much higher than the issue price of Rs 390 apiece for the Carlyle deal.
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