ICICI Securities Delisting: Whistleblower Alleges Malpractice At BofA; Timing Questioned
The whistleblower claimed that BofA Securities received the mandate for the fairness opinion only four-five days before ICICI Bank board's approval on June 29, 2024.
In a fresh twist in the case pertaining to ICICI Securities Ltd.'s delisting and merger with ICICI Bank Ltd., a whistleblower has made accusations on the role of BofA Securities India—the independent merchant banker tasked with providing a fairness opinion on the valuation and swap ratio for the deal.
In a detailed mail, dated Oct. 22, sent to the Securities and Exchange Board of India, the whistleblower claimed that BofA Securities received the mandate for the fairness opinion only four-five days before ICICI Bank board's approval on June 29, 2024.
Despite the tight timeline, the opinion was signed the same day the valuation report was received, raising questions about the thoroughness and independence of the process.
However, people close to the matter have questioned the timing of the allegations. The valuation report, prepared in July 2023, had been cleared by SEBI, the National Company Law Tribunal, stock exchanges, and the boards of both ICICI Bank and ICICI Securities.
Yet as per the people in the know, since the whistleblower's letter was submitted to SEBI only last month, it raises suspicions about its motive and intent.
Key Allegations by Whistleblower:
Conflict of Interest: The mandate for the fairness opinion allegedly came from ICICI Bank instead of ICICI Securities, with ICICI Bank officials allegedly steering the valuation process.
Pre-Determined Outcomes: It is claimed that BofA Securities was instructed to "rubber-stamp" valuations and swap ratios provided by ICICI Bank.
Irregular Communication: Evidence of extensive interactions between BofA Securities officials and ICICI Bank personnel—rather than ICICI Securities—is said to exist on BofA’s IT systems.
Other Details
The whistleblower also alleged that key deliberations were held on personal devices and through WhatsApp, potentially leaving regulatory blind spots.
They further criticised proxy advisory firms for endorsing what is described as a "low valuation" despite pushback from retail investors. Additionally, minority shareholders have opposed the delisting since its inception, citing unfair pricing and lack of transparency.
The whistleblower's letter, addressed to multiple SEBI officials, urges the regulator to investigate the alleged improprieties. It also mentions internal records at BofA Securities, including emails, IT system logs, and meeting records, as potential evidence.
Queries sent on mail to SEBI, BofA, ICICI Bank, and ICICI Securities did not receive a response at the time of publishing this report.
Minority Shareholders Await NCLAT Decision
A separate case filed by minority shareholders opposing the delisting remains pending before the National Company Law Appellate Tribunal. They argue that the deal disproportionately benefits ICICI Bank at the expense of ICICI Securities' investors.
