PNB Housing Finance said that the Securities and Appellate Tribunal (SAT) on Monday that the market regulator cannot compel it to follow the Articles of Association (AoA) as it is just a contract.

It argued that AoA cannot override the Securities and Exchange Board of India’s ICDR (Issue of Capital and Disclosure Requirements) regulations, which listed firms have to follow for issuing preferential allotments.

The company law does not require engaging the services of registered valuers when a listed company is making a preferential issue, PNB Housing Finance told the tribunal. The company added that other listed firms with AoAs similar to its own also raise capital via preferential allotment as per the ICDR guidelines.

Last month, PNB Housing had announced its capital-raising plan that involved preferential allotment of shares worth Rs 3,200 crore and warrants worth Rs 800 crore to a clutch of investors led by the Carlyle Group. Stakeholders Empowerment Services (SES), a proxy advisory firm had called the deal “unfair” to public shareholders of the company and those of PNB. The mortgage lender had defended the deal stating that the process followed in determining the issue price for its securities was in line with the market practice and complied with the applicable law.