NCLT Postpones ICICI Securities Delisting Case to July

The ICICI Securities delisting saga faced another hurdle as the National Company Law Tribunal (NCLT) pushed the case to July, citing concerns from minority shareholders about potential breaches of shareholder privacy and voting process manipulation by the company.

Last month, Manu Rishi Gupta and over 100 shareholders initiated a class-action lawsuit against ICICI Securities’ delisting and merger plan with ICICI Bank. They alleged that ICICI Securities had shared confidential shareholder information with ICICI Bank, jeopardizing investor privacy and independence.

Here’s a recap of events so far:

• ICICI Bank’s board approved ICICI Securities’ delisting on June 29, 2023. Under the scheme, ICICI Bank would exchange 67 equity shares for every 100 shares of ICICI Securities, making it a wholly-owned subsidiary.
• Concerns arose about the valuation and share-swap ratio of ICICI Securities, especially given its low price compared to its IPO.
• Manu Rishi Gupta rallied shareholders against the delisting, highlighting the significant disparity in valuation between the IPO and delisting.
• Regulatory approvals were obtained from the RBI, BSE, and NSE for the delisting.
• Discontent grew among investors during an analyst conference call on January 16, 2024, regarding the swap ratio.
• Despite resistance, ICICI Securities’ delisting was approved on March 28, 2024, with 71.89% of votes in favor, though concerns about manipulation and privacy breaches persisted.
• Shareholders, including several mutual funds, voted against the delisting proposal.
• Allegations of vote manipulation and breach of shareholder privacy led to a lawsuit and subsequent investigation by SEBI.
• The NCLT deferred the case to July for further review, amid ongoing scrutiny and market turbulence.

In the past three months, ICICI Securities’ shares fell over 9%, contrasting with the modest rise in the Nifty 50 index.