ICICI Securities, ICICI Bank Get NCLAT Notice In Appeal Against Delisting Approval

The National Company Law Appellate Tribunal on Tuesday issued notices to ICICI Securities Ltd. and ICICI Bank Ltd. in the appeal by shareholders against the delisting approval of ICICI Securities.

ICICI Securities argued that while the shareholders have appealed the scheme, the order approving it remains unchallenged. The NCLT bench of Mumbai that had earlier approved the scheme had given two separate orders—one approving the scheme, and the other rejecting the objections of the shareholders.

The counsel for ICICI Securities also pointed out that the shareholders opposing the delisting represent a much smaller percentage than the required 10% threshold to challenge such a scheme, raising questions about the maintainability of the appeal. It was further submitted that the appeal is not maintainable, as the shareholders’ rights were not infringed.

Meanwhile, the shareholders claimed that they initially filed an appeal against both orders but were instructed by the registry to file separate appeals. They mentioned that if the ICICI Securities' counsel has not been served the necessary documents, it is not their fault. The shareholders also pointed out that the Securities and Exchange Board of India had identified issues related to the delisting vote, yet the NCLT approved the plan.

The NCLAT has allowed ICICI Securities to file an application challenging the maintainability of the appeal.

The dispute originates from ICICI Securities' delisting plan, which was approved by 93.8% of equity shareholders. The delisting offered a share exchange ratio of 67 ICICI Bank shares for every 100 ICICI Securities shares.

Despite this approval, Quantum Mutual Fund, holding 0.08% stake, and Manu Rishi Gupta, a minority shareholder with 0.002% stake, opposed the plan, alleging misconduct by ICICI Bank employees during the voting process. However, the NCLT dismissed their concerns and cleared the delisting.

A related case is also pending in the Bombay High Court, where SEBI's exemption to ICICI Securities from the reverse book-building process is being challenged. Both the NCLAT appeal and the high court case suggest that ICICI Securities' delisting may encounter further legal obstacles.