NCLT Approves ICICI Securities Delisting Despite Shareholders' Opposition

The National Company Law Tribunal bench of Mumbai, on Wednesday, approved the delisting of ICICI Securities Ltd., dismissing objections raised by Quantum Mutual Fund and minority shareholder Manu Rishi Gupta.

Under the approved scheme, ICICI Securities shareholders will receive 67 ICICI Bank Ltd. shares for every 100 shares they hold. The scheme had earlier secured approval from 93.8% of ICICI Securities' equity shareholders.

Quantum Mutual Fund and Manu Rishi Gupta, who held 0.08% and 0.002% of ICICI Securities shares respectively, had opposed the scheme. They had alleged undue influence by ICICI Bank employees on the voting process. However, their objections have now been dismissed.

The shareholders are now strategising and keeping their options open, Gupta told NDTV Profit in response to the hearing. This is just the beginning and they are prepared to take the legal battle forward, he said.

The case revolves around allegations that ICICI Bank pressured shareholders into supporting its proposal to delist ICICI Securities, its broking subsidiary, from Indian stock exchanges.

Shareholders claimed that ICICI Bank employees, rather than those of ICICI Securities, contacted public shareholders, asking them to vote in favor of the delisting. It was further alleged that ICICI Bank used a PowerPoint presentation to sway shareholders, exploiting the lack of technological expertise among some of them.

A similar case related to this delisting is currently being heard in the NCLT in Delhi.

The Bombay High Court is also addressing related concerns. The Bombay High Court has directed the Securities and Exchange Board of India to disclose a letter that granted ICICI Securities an exemption from the reverse book building process required for delisting.

This exemption had been contested by Aruna Vinod Modi, another shareholder of ICICI Securities.

The court ruled that SEBI must provide a copy of the exemption letter to Modi, but with strict conditions prohibiting her from sharing, reproducing, or allowing third-party access to the letter. Modi challenged SEBI's decision in court, arguing that the exemption violated the provisions of the delisting regulations and that SEBI had overstepped its authority.