Report states that a tribunal has dismissed petitions challenging ICICI Securities' delisting

On Wednesday, the National Company Law Tribunal (NCLT) dismissed the objections raised by minority shareholders against the delisting of ICICI Securities. The petitions were filed by shareholders including Quantum Mutual Fund and investor Manu Rishi Guptha, who contested the move, arguing that it would be detrimental to minority shareholders and alleging that ICICI Securities' shares were undervalued in the buyout deal.

In March, ICICI Bank, which holds approximately 75% of ICICI Securities' shares, secured shareholder approval to acquire the remaining stake in a deal valued at $622 million. This transaction, structured as a share swap, aims to make ICICI Securities a wholly-owned subsidiary of ICICI Bank and facilitate its delisting from stock exchanges.

The petitioners argued that the delisting would negatively impact minority shareholders by potentially undervaluing their stakes and reducing their ability to trade shares. However, ICICI Securities refuted these claims, asserting that the petitioners did not meet the statutory requirements for filing objections under the Companies Act. The Act stipulates that petitioners must own at least 10% of the company’s equity or 5% of its outstanding debt to have standing in such matters. According to reports, Quantum Mutual Fund and Manu Rishi Guptha own only 0.08% and 0.002% of ICICI Securities, respectively.

Before the vote to approve the delisting, ICICI Securities had faced criticism from some retail investors, with allegations that ICICI Bank may have attempted to sway votes in favor of the delisting. This criticism added to the controversy surrounding the deal.

Following the NCLT's dismissal of the objections, ICICI Securities' shares experienced a notable decline. Despite an approximate 11% increase in share value since the approval of the delisting, the shares closed at a loss of 7.52% on Wednesday. Neither ICICI Securities, the NCLT, Quantum Mutual Fund, nor Manu Rishi Guptha immediately responded to Reuters' requests for comments regarding the tribunal's decision and the implications for shareholders. 

The tribunal's decision represents a significant step in the process of ICICI Securities’ transition to being a wholly-owned subsidiary of ICICI Bank, and it underscores ongoing debates about the fairness and impact of such corporate moves on minority investors.