There has been an important development in the direction of ICICI Securities delisting process. NLCT Ahmedabad has approved the delisting, overruling the objections of minority shareholders. Earlier, NCLT Mumbai has also given approval for delisting. While SEBI had also issued an exemption letter in June 2023.
SEBI had given concessions
This letter was issued by SEBI after the application of ICICI Securities. Actually ICICI Securities had applied on 18 May 2023 for exemption from the reverse book building process required for delisting.
Actually in this application, ICICI Bank had sought some concessions under Regulation 37. ICICI Bank had also sought exemption from the criteria fixed in the SEBI circular issued on 6 July 2021.
Regulation 37 and the 2021 circular define the conditions to be fulfilled during delisting for holding and subsidiary companies (if they are in the same business line).
ICICI Bank’s argument for getting concession
ICICI Bank said that due to regulatory restrictions it is not possible to run banking and stock broking activities in a single entity.
This means that regulatory rules prevented ICICI Bank from running these two different types of businesses under the same company structure. Therefore, the bank sought relaxation in the rules related to ‘same business line’ during delisting.
In response, SEBI had agreed to give the necessary exemptions and ICICI Bank was allowed certain relaxations in compliance with Regulation 37.
The concession was given with conditions
But this exemption was given with certain special conditions. The regulator clearly stated that this exemption letter should not be seen as an exemption from legal obligations. It has been issued only to exempt certain special provisions in the delisting regulations, so that ICICI Bank can proceed with its delisting process.
Let us tell you that according to the scheme approved by NCLT Mumbai, ICICI Securities shareholders will get 67 shares of ICICI Bank for every 100 shares. Earlier this scheme was approved by 93.8% ICICI Securities equity shareholders.
The scheme was opposed by Quantum Mutual Fund and Manu Rishi Gupta, who both held 0.08% and 0.002% shares of ICICI Securities respectively. They argued for undue influence of ICICI bank employees in the voting process.