Bombay High Court Orders SEBI to Reveal ICICI Securities Exemption Letter in Delisting Case

The Bombay High Court has ordered SEBI, the capital markets regulator, to disclose the letter that allowed ICICI Securities to skip the reverse book-building process, which is usually required for delisting a company.

On Wednesday, the court directed SEBI to provide a copy of this exemption letter to Aruna Vinod Modi, a shareholder of ICICI Securities, who had filed a petition challenging SEBI’s decision. However, the court stated that Modi must agree to keep the contents of the letter confidential and not share it with anyone else or allow anyone else to view it.

Last month, Modi had contested SEBI’s decision to grant ICICI Bank, the parent company of ICICI Securities, an exemption from the usual delisting rules. In her petition, she argued that SEBI had overstepped its authority by giving this exemption, as the delisting regulations do not permit such relaxations unless both the listed subsidiary and the parent company are in the same line of business. Since ICICI Securities is a stockbroker and ICICI Bank is a commercial bank, Modi argued that this exemption should not apply.

Back in March, public shareholders of both ICICI Bank and ICICI Securities approved a plan where ICICI Bank would delist ICICI Securities through a share-swap deal. Under this plan, for every 100 shares of ICICI Securities, public shareholders would receive 67 shares of ICICI Bank. However, some minority shareholders of ICICI Securities are unhappy with this arrangement, feeling that the share-swap ratio is unfair.

Modi’s petition also mentioned that SEBI did not provide a copy of the exemption letter issued to ICICI Securities on June 20, 2023, despite repeated requests. She expressed concern that SEBI’s decision to relax the delisting rules in this case could lead to other companies misusing these regulations.