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Informist, Monday, Mar. 10, 2025

 

--NCLAT OKs ICICI Securities' delisting, junks minority shareholders' pleas 

 

NEW DELHI – The National Company Law Appellate Tribunal on Monday approved the delisting of shares ICICI Securities Ltd. on stock exchanges and rejected objections by certain minority shareholders who had opposed it. The bench of judicial member Justice Yogesh Khanna and technical member Ajai Das Mehrotra, in an oral order said, "All appeals (by minority shareholders) are dismissed". A detailed order is awaited.

 

Earlier, Quantum Mutual Fund and an investor Manu Rishi Gupta had objected on the Mumbai and Ahmedabad benches of the National Company Law Tribunal the delisting of ICICI Securities shares. They had highlighted concern 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 had also questioned the fairness of the deal, especially given the stock's low price relative to its potential. 

 

 

Quantum Mutual Fund had said that the Securities and Exchange Board of India colluded with the financial broking firm in regard to the latter's delisting. Citing a SEBI letter, Quantum Mutual Fund had said SEBI had granted ICICI Bank an exemption to give it certain flexibility on Regulation 37 of market regulator's delisting regulations. Contesting this, ICICI Securities said SEBI's letter could not be challenged before the National Company Law Tribunal or National Company Law Appellate Tribunal. 

 

ICICI Securities had argued that Quantum Mutual Fund and Gupta had no locus standi in the case. The Companies Act, 2013 provided 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 had 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.

 

On Aug. 21, the Mumbai bench of the tribunal had approved ICICI Securities' delisting plan. Thereafter, on Oct. 9, the Ahmedabad bench of the tribunal had also rejected the petitions by the minority shareholders. Against both the verdicts, the minority shareholders had moved the appellate tribunal. 

 

At 1055 IST, the shares of ICICI Bank were up 0.6% at INR 1,222.15 on the National Stock Exchange, while the shares of ICICI Securities Ltd. were up 1.0% at INR 803.80.  End

 

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

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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