SEBI Said To Be Conducting Preliminary Enquiries In ICICI Securities Delisting Case

The Securities and Exchange Board of India has opened a preliminary enquiry related to the delisting of ICICI Securities Ltd., after more than 100 shareholders filed a class action suit in a tribunal against the plan, according to people with knowledge of the matter, who spoke on condition of anonymity.

SEBI has been made a party to the suit filed by minority shareholders with the National Company Law Tribunal. The market regulator is in the process of gathering information on the manner in which ICICI Bank Ltd. canvassed shareholders ahead of the delisting, the people quoted above told NDTV Profit.

The board will decide on the future course of action, depending on the outcome of preliminary enquiries, they said.

Shareholders have raised concerns on the way the delisting process is going through, inappropriate valuation, swap ratio, and ICICI Bank's attempts to influence shareholders to vote in favour of the delisting.

The terms of the arrangement stated that shareholders of ICICI Securities will get 67 shares of ICICI Bank against every 100 shares held, after the delisting process.

The shareholders' vote, conducted in the last week of March, for delisting of ICICI Securities saw a lot of opposition from retail shareholders. Some shareholders said that ICICI Bank employees called them incessantly, goading them to vote in favour of the proposal.

Despite the opposition, votes in favour of delisting by institutional shareholders managed to swing the vote results on March 28.

About 72% of the shareholder votes were cast in favour of the proposal to merge ICICI Securities with ICICI Bank after a delisting process.

Among the public institutional shareholders, 83.8% voted in favour of the proposal, while among the public non-institutional shareholders, only 32% votes were in favour. However, the large institutional holdings in ICICI Securities led to the proposal being cleared.

Foreign and domestic institutional investors own 16.68% in the broking firm. Non-institutional public shareholders held 8.55% in the company as of Dec. 31, 2023, according to stock exchange data.

SEBI requires that in cases of delisting and merger of a subsidiary with its holding company, votes in favour by shareholders of a delisted firm must be at least two times higher than of those voting against it. More shareholders in the listed holding company must have voted in favour than the votes against the proposal.