Did the Supreme Court Justify the Delisting of ICICI Securities?
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Synopsis
The Supreme Court's recent ruling on the delisting of ICICI Securities raises significant questions about shareholder rights and corporate governance. With a substantial majority supporting the merger with ICICI Bank, the decision underscores the complexities of stock market operations and investor concerns.
Key Takeaways
- The Supreme Court upheld the delisting of ICICI Securities.
- Individual investor concerns highlighted issues of fairness in share valuation.
- 72% of shareholders supported the merger with ICICI Bank.
- The delisting was executed following an NCLT directive.
- A proposed share-swap arrangement was part of the merger plan.
New Delhi, May 28 (NationPress) The Supreme Court on Wednesday upheld the delisting of ICICI Securities from the stock exchanges, dismissing a challenge by an individual investor regarding the fairness of the share valuation process.
The investor, Manu Rishi Gupta, argued that a reverse book building mechanism could have yielded a better price for shareholders.
ICICI Securities was officially delisted in March of the previous year, becoming a wholly-owned subsidiary of ICICI Bank.
Gupta's attorney argued in the apex court that the delisting was executed in a manner that was both opaque and hurried, labeling the situation as "shocking".
Representatives for ICICI Securities informed the Supreme Court that Gupta had continued to buy and sell shares of ICICI Securities, including transactions as recent as August 2024, which called into question his claims of unfair treatment.
Approximately 72 percent of shareholder votes were cast in favor of the arrangement for merging ICICI Securities with its parent company, ICICI Bank, according to a regulatory filing.
This voting followed a directive from the National Company Law Tribunal (NCLT) in February 2024, which required a shareholder meeting to approve the merger plan. The meeting saw attendance from 161 equity shareholders and authorized representatives.
Earlier this year, the National Company Law Appellate Tribunal (NCLAT) had also upheld ICICI Securities’ delisting, dismissing appeals from shareholder groups, including Quantum Mutual Fund and individual investor Manu Rishi Gupta.
Quantum Mutual Fund had filed an appeal against the delisting in September, expressing concerns regarding its effect on minority shareholders, but the Ahmedabad bench of the NCLT had approved the delisting.
ICICI Securities announced its intention to delist and merge with ICICI Bank in June 2023, and shareholders approved this plan in March 2024. Under the proposed share-swap arrangement, shareholders would receive 67 shares of ICICI Bank for every 100 shares of ICICI Securities.
Point of View
The Supreme Court's ruling on ICICI Securities reflects the ongoing tension between corporate governance and shareholder interests. While the majority of shareholders supported the merger, the concerns raised by individual investors highlight the need for transparency and fairness in financial practices. This ruling could set a precedent for future cases involving share valuations and delistings.
NationPress
08/06/2025
Frequently Asked Questions
What was the Supreme Court's decision regarding ICICI Securities?
The Supreme Court upheld the delisting of ICICI Securities from the stock exchanges, rejecting challenges over the share valuation process.
Who challenged the delisting of ICICI Securities?
Individual investor Manu Rishi Gupta challenged the delisting, claiming the share valuation was unfair.
What percentage of shareholders supported the delisting?
Approximately 72% of shareholders voted in favor of the delisting and merger with ICICI Bank.
When was ICICI Securities officially delisted?
ICICI Securities was officially delisted in March of the previous year.
What arrangement was proposed for shareholders during the merger?
Shareholders were to receive 67 shares of ICICI Bank for every 100 shares of ICICI Securities.
