ICICI Securities vs Shareholders: Showdown Heading to Bombay High Court

The conflict between ICICI Securities and its shareholders might soon be taken to the Bombay High Court. The Mumbai bench of the National Company Law Tribunal (NCLT) said it does not have the power to decide on the legality of the exemption granted by the Securities and Exchange Board of India (SEBI) for delisting ICICI Securities without using the reverse book-building process.

They suggested that this issue should be taken to the appropriate court.

Senior counsel Kaushik Chatterjee, representing the shareholders, argued that SEBI illegally allowed ICICI Securities to delist its shares without following the usual process. This exemption was granted even though the listed holding company and its listed subsidiary are supposed to be in the same line of business. Chatterjee also mentioned that neither SEBI nor ICICI Securities have shared the exemption letter with the shareholders.

Due to this lack of transparency, Chatterjee stated that the shareholders have no choice but to challenge SEBI’s decision in the Bombay High Court.

ICICI Securities, on the other hand, argued that the objections to the delisting process are against the principles of shareholder democracy. They sought to have the objections dismissed, stating that only those holding at least 10% of equity or 5% of the total outstanding debt can object under the Companies Act.

Two separate objections have been raised: one by Quantum Mutual Fund and another by investor Manu Rishi Gupta, who represents over 100 minority shareholders. Gupta filed a class action suit with the Delhi bench of the NCLT against the delisting.

Meanwhile, the scheme of arrangements between ICICI Securities and ICICI Bank was approved by public shareholders, with 71.89% voting in favor and 28.11% voting against it. According to this scheme, ICICI Securities shareholders will receive 67 shares of ICICI Bank for every 100 shares they hold.