Stock exchanges examining the issuance of preferred shares to the parent company: LIC HFL
The housing finance arm of state-owned Life Insurance Corp, LIC Housing Finance, said on Saturday that the stock exchanges were considering its proposal for a preferential allocation of shares to the parent company.
In June of this year, LIC Housing Finance informed that LIC would inject equity capital of approximately Rs 2,334.70 crore into the subsidiary by taking an additional stake.
LIC Housing Finance (LIC HFL) has fixed the issue price of the shares at Rs 514.25 each to its promoter Life Insurance Corporation of India (LIC) on a preferential basis.
The company has, in an email dated July 16, 2021, from BSE India Limited and the National Stock Exchange of India Limited received information that said preferential allocation is under review by the exchanges, said LIC Housing Finance in a regulatory file.
“He was further instructed from said stock exchanges that in the interest of investors in the securities market, the vote in EGM may be carried out. However, the results of the vote on item 1 of the agenda cannot be made public, and the same should be kept in a sealed envelope pending the completion of the review, âhe said in the file.
The company has said, in accordance with the instructions from the exchanges, that it will not make the results of the vote public.
The same will be kept in a sealed envelope pending the completion of the review by the relevant authorities, he said.
“The company is considering all of its options regarding this matter and we would like to categorically state that the company has fully complied with the applicable provision for the valuation of shares offered to LIC on a preferential basis,” said the funder.
The AGE of the company is scheduled for Monday July 19 for the issue of the preferential allocation of shares to LIC to be submitted to shareholders for approval.
LIC Housing Finance said it received an email from BSE and NSE on July 12, requesting clarification on compliance with the provisions of the Company’s Articles of Association (AOA) regarding the process arrived for the valuation at which said shares are offered to LIC .
He said the company clarified that “there was no violation of the provisions of the AOA, as the price was duly determined in accordance with the relevant provisions of the AOA as well as the Companies Act. of 2013 and the SEBI (Capital Issue and Disclosure Requirements) Regulations, 2018 â.
The latest July 16 email from the exchanges also requested further clarification as to why the valuation report of a registered appraiser was not taken into account when determining the price of these proposed shares to be issued. on a preferential basis, he added.
“The company reiterated again that the price of the preferential allotment was set in accordance with the provisions of the AOA, the company law,” he added.
As part of this issue, LIC Housing Finance will allocate 4,54,000,000 shares to the Life Insurance Corporation of India (LIC). âThe issue price for the share of shares with par value of Rs 2 each will be Rs 514.25 each, which is the price calculated in accordance with Sebi regulation of 2018,â LIC HFL said in June.
The case is growing in importance as the capital injection of Rs 4,000 crore offered by PNB Housing Finance instead of preferential shares to investors led by the US-based Carlyle group came under the control of the capital market regulator and the case has now reached the securities appeal court.
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