India's ICICI Bank faces pushback against delisting brokerage unit (updated)

ICICI Securities

06/06/2024 14:38

(Updates with court developments of ICICI Securities delisting)
    By Jayshree  P Upadhyay
       MUMBAI, June 6 (Reuters) - India's ICICI Bank  ICBK.NS 
is facing pushback against delisting its unit ICICI Securities,
with some shareholders trying to block the move and the market
regulator hauling the bank up over its processes to win
shareholder approval.
    In March, around 72% of ICICI Securities's  ICCI.NS 
minority shareholders voted in favour of selling their shares to
ICICI Bank, which holds a roughly 75% stake in the brokerage.
    Ahead of the vote, media reports said ICICI Bank employees
called ICICI Securities' shareholders, soliciting their votes in
favour of the move.
    India's markets regulator had received several complaints
about these calls and had issued ICICI Bank a warning letter in
this regard, saying the outreach was against regulations, the
bank disclosed.
    The bank argued that the so-called outreach was to present
shareholders a factual position of the transaction.
    However, the Securities and Exchange Board of India (SEBI)
said that since ICICI Bank was an interested party, there was a
conflict of interest and thus, the outreach was inappropriate.
    "This has been viewed seriously," the SEBI said.
    Moreover, Quantum Mutual Fund, an investor in ICICI
Securities, moved an India company tribunal against the proposed
delisting, saying the buyout price was low and that the
delisting process violated rules.
    A local tribunal in Ahmedabad in the western state of
Gujarat heard Quantum's plea on Wednesday and the next hearing
is scheduled for July.
    This is a second suit aimed at stopping the delisting.
    Last month, a clutch of retail shareholders had filed a plea
against the plan, according to local media reports.

 (Reporting by Jayshree P Upadhyay; Editing by Savio D'Souza)
 ((Jayshree.Pyasi@thomsonreuters.com; 9920092491; Reuters
Messaging: Twitter: @jaysh88))