NSE, BSE seek clarity on LIC Housing Finance's preferential allotment to LIC
LIC Housing Finance Ltd on Saturday said the National Stock Exchange and BSE have sought clarification from the company on its ₹2,334 crore preferential allotment of shares to parent Life Insurance Corp of India (LIC).
This comes on the heels of markets regulator Sebi's scrutiny of ₹4,000 crore preferential allotment by PNB Housing Finance to Carlyle and other investors. PNB Housing Finance is currently fighting an appeal in the Securities Appellate Tribunal against the market regulator Sebi.
Last month, LIC Housing Finance announced that it will issue 4.54 crore shares to LIC at ₹514.25 apiece totalling ₹2,334 crore.
"The company had received an email dated 12 July, 2021 from, BSE Ltd and, National Stock Exchange of India Ltd seeking clarifications on compliance with the Provisions of Articles of Association (AOA) of the Company regarding process arrived for the valuation at which the said equity Shares are offered to LIC. The Company had provided the clarification that there is no violation of the provisions of AOA as the price has been duly determined in accordance with the relevant provisions of the AOA as well as the Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018," LIC Housing Finance said in an exchange filing.
The company said that it received another mail dated 16 July from BSE and NSE seeking further clarifications on why the valuation report of a registered valuer has not been considered while determining the price of such shares proposed to be issued on preferential basis.
"The Company had again reiterated that, the price for the preferential allotment has been arrived at in compliance with the provisions of AOA, the Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 as the Company being a Listed Company is not required to Obtain a Registered valuers Certificate as provided under Rule 13 of the Companies (Share Capital and Debentures) Rules, 2014."
LIC Housing Finance has received a direction from the exchanges that “in the interest of investors in the securities market, the voting in the EGM may be carried on. However, the results of the voting on Agenda item no. 1 may not be made public and the same shall be kept in a sealed cover pending the completion of examination," the company said in the filing.
"In compliance with the directions of the Stock Exchange the Company hereby informs the Members the results of the voting on Agenda item no. 1 of the Company’s Notice dated 24" June 2021 will not be made public and the same shall be kept in a sealed cover pending the completion of examination by the relevant Authorities," the filing said.
"The company is considering all its option regarding the said matter and we would like to categorically state the company has fully complied with the applicable provision for valuation of the Equity Shares offered to LIC on a preferential basis."