The National Company Law Appellate Tribunal (NCLAT) has dismissed appeals against delisting of ICICI Securities from stock exchanges.
Last August, the NCLT Mumbai Bench sanctioned the scheme of arrangement between ICICI Bank and ICICI Securities, paving the way for the delisting of the latter and its transformation into a wholly-owned subsidiary of the bank.
Challenging the order of NCLT, two shareholders — Quantum Mutual Fund and Manu Rishi Gupta — opposed the move and argued that the share swap ratio was unfair to minority shareholders. They filed a petition in NCLAT against NCLT approval.
On Monday, a quorum of Judicial Member Justice (retired) Yogesh Khanna and Technical Member Ajay Das Mehrotra passed the order approving NCLT order.
The background
In June 2023, ICICI Securities announced plans to delist and merge with its parent company, ICICI Bank. As part of the approved scheme, shareholders were set to receive 67 shares of ICICI Bank for every 100 shares of ICICI Securities. In March 2024, nearly 72 per cent of shareholders supported this plan.
ICICI Securities was listed in March 2018. However, due to the cyclical nature of the securities business and regulatory restrictions preventing ICICI Bank from directly engaging in securities broking, the companies proposed this scheme to enhance operational synergies and provide greater stability to public shareholders.
Earlier, NCLT dismissed the objections stating that the scheme was approved by a significant majority of shareholders and complied with all legal and regulatory requirements. The Tribunal noted that the objectors did not meet the threshold of holding at least 10 per cent of the shareholding required to challenge the scheme under Section 230 (4) of the Companies Act, 2013.