Senior counsel Kaushik Chatterjee, who represented the shareholders before the NCLT, argued that the Sebi has illegally granted an exemption to ICICI Securities under Section 37 (1) of the Delisting Regulations. This exemption allows ICICI Securities to delist its shares from the bourses without going through the reverse book-building process despite the requirement that the listed holding company and the listed subsidiary be in the same line of business, he said.
“No one has seen the exemption letter as both the Sebi and ICICI Securities have refused to share the letter with shareholders,” said Chatterjee. “So, we are not left with any choice except to move High Court Mumbai to challenge the legality of exemption granted by Sebi to both the companies from not being in the same line of business.”
ICICI Securities on Tuesday argued that two applications filed against the company’s proposed delisting were in complete derogation of the principle of shareholder democracy and sought to get them dismissed. ICICI Securities argued that the proviso to Section 230(4) of the Companies Act provides that any objection to a scheme of arrangement under Section 230 of the Act shall be made only by persons either holding at least 10% of equity or 5% of the total outstanding debt, as per the latest audited financial statement.
In two separate applications, Quantum Mutual Fund and an investor, Manu Rishi Gupta, have objected to the proposed delisting of ICICI Securities claiming that the swap adversely affects minority shareholders. Gupta, a Bengaluru-based investment advisor, as the representative for more than 100 minority shareholders filed a class action suit with the Delhi bench of NCLT against the delisting.
Meanwhile, the scheme of arrangements between ICICI Securities and ICICI Bank has been approved by the public shareholders, with 71.89% voting in favour of the resolution, and only 28.11% voting against it. As per the scheme, ICICI Securities shareholders will receive 67 shares of ICICI Bank for every 100 shares held.
