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Informist, Wednesday, Aug 21, 2024

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal today approved ICICI Securities Ltd's delisting plans and dismissed applications by certain minority shareholders who had opposed it. On Aug 5, a bench comprising judicial member Virendrasingh Bisht and technical member Prabhat Kumar had reserved its order in the case. A detailed order is awaited. 

 

Earlier, Quantum Mutual Fund and an investor, Manu Rishi Gupta, had objected to the proposed delisting of ICICI Securities. They had highlighted concerns regarding the depressed valuation and share-swap ratio of ICICI Securities, saying the swap adversely affected minority shareholders. Quantum Mutual Fund and Gupta hold 0.08% and 0.002%, respectively, of the paid-up equity share capital of ICICI Securities. They also questioned the fairness of the deal, especially given the stock's low price relative to its potential. 

 

ICICI Securities had argued in the tribunal that Quantum Mutual Fund and Gupta had no locus standi in the case. The Companies Act provides that any objection to a scheme of arrangement shall be made only by persons either holding at least 10% equity or 5% of total outstanding debt, it said.

 

As per the delisting scheme, ICICI Bank will issue 67 shares for every 100 shares of the brokerage held by public shareholders. The scheme of arrangement envisages the cancellation of around 25.2% shares of ICICI Securities held by public shareholders and making it a wholly-owned subsidiary of ICICI Bank.

 

The plan, which was announced in June 2023, was approved by shareholders of ICICI Securities in March, with 72% of minority shareholders voting in favour. On Jun 29, 2023, ICICI Bank's board also approved the plan.

 

At 1152 IST, shares of ICICI Securities traded 2.7% lower at 825.00 rupees on the National Stock Exchange, while those of ICICI Bank traded 0.8% lower at 1,169.35 rupees.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Namrata Rao

 

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