ICICI Securities Shareholders Allege ICICI Bank Influence in Delisting Process: Report
Moneylife Digital Team 14 May 2024
During a hearing on Monday, shareholders of ICICI Securities Ltd claimed before the national company law tribunal (NCLT) that ICICI Bank Ltd influenced them to support its proposal to delist the broking subsidiary, says a report.
 
According to a report from NDTV Profit, these shareholders claimed that employees of ICICI Bank and not that of ICICI Securities, contacted public shareholders, persuading them to vote in favour. They created a PowerPoint presentation to influence shareholders, exploiting the lack of technological expertise among many of them.
 
However, the NCLT bench questioned how the shareholder's advocate was able to distinguish which shareholders were technologically savvy enough to understand the issues at hand, the report says.
 
When Kaushik Chatterjee, the counsel for the shareholders, failed to provide a satisfactory answer, the NCLT bench dismissed the argument, stating that shareholders are expected to be intelligent. 
 
According to the report, the bench emphasised that everyone possesses the capacity to understand such matters, and if someone suffers financial losses in shareholding, it is their responsibility.
 
Earlier, in a clarification, ICICI Securities said it and ICICI Bank undertook efforts to reach out to public shareholders to explain the proposed scheme and the e-voting process with the primary objective of maximising participation in the voting. 
 
In the last week of March, nearly 94% of shareholders of ICICI Securities approved the scheme of arrangement with ICICI Bank. The meeting was convened following an order by the Mumbai bench of NCLT on 14 February 2024. (Read: Shareholders Approve Delisting, ICICI Securities Accepts Reaching Public Shareholders Using ICICI Bank, Third-party Agency )
 
Several customers of ICICI Bank, who were also shareholders of ICICI Securities, pointed out how bank managers and relationship managers are approaching them to convince them to vote for the delisting proposal. 
 
In a regulatory filing at that time, ICICI Securities said, "There is an overlap between the categories of shareholders and retail customers across both entities. ICICI Securities had also engaged the services of a third party for this purpose as is often done in similar such cases. The approach in the outreach was to explain the scheme, facilitate voting and to not pursue repeated engagement if declined by the shareholder."
 
"Consequently, we felt that it was essential to reach out to retail shareholders to maximise participation in and to facilitate a considered outcome of the voting exercise," it says, adding, "As intimated to the stock exchanges, the outcome of votes cast by public shareholders of ICICI Securities at the NCLT convened equity shareholders meeting in favour of the resolution was about 71.9% of the public shareholders of our company, which is in excess of the requisite majority of two-thirds of the public shareholders' votes required under applicable SEBI regulations."
 
Last year in November, ICICI Bank received a nod from the Reserve Bank of India (RBI) to make ICICI Securities its wholly-owned subsidiary. 
 
In a regulatory filing on 29 June 2023, ICICI Securities announced that it would delist and become a wholly-owned subsidiary of its parent company, ICICI Bank.
Comments
saran2sai
1 month ago
It could have been better understood, if the reasons for delisting of ICICI sec. or making it wholly owned subsidiary of ICICI Bank was explained. Will other brokerage / securities Cos also (if related to banks) merge with their respective banks ?
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