NCLAT Issues Notice to ICICI Securities Over Minority Shareholders’ Appeal in Delisting Case

The National Company Law Appellate Tribunal (NCLAT) issued a notice to ICICI Securities on Tuesday following an appeal by two minority shareholders against the delisting of the financial broking firm. The notice was in response to petitions filed by Manu Rishi Gupta and Quant Mutual Fund, who hold small stakes in the company, opposing the August 21 decision by the National Company Law Tribunal (NCLT) to approve the delisting.

A tribunal bench led by justices Yogesh Khanna and Ajai Das Mehrotra agreed to hear the appeal, which challenges the NCLT’s earlier order allowing ICICI Securities to delist and merge with its parent company, ICICI Bank.

ICICI Securities’ senior counsel, Arun Kathpalia, argued that the minority shareholders’ objections had already been considered and dismissed by the NCLT. He also noted that the law requires shareholders to hold at least 10% of the company to challenge such schemes, making the petition ineligible.

The minority shareholders, who own 0.002% and 0.08% of ICICI Securities’ equity, opposed the delisting on the grounds that the share swap would negatively impact their holdings. Under the delisting plan, shareholders would receive 67 shares of ICICI Bank for every 100 shares of ICICI Securities. Despite this opposition, the majority of minority shareholders—72%—voted in favor of the plan.

ICICI Bank’s board approved the merger and delisting in June 2023, with regulatory approvals following from the Reserve Bank of India and stock exchanges. The case will now proceed to a detailed hearing in the NCLAT.