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The Bombay High Court directed the Securities and Exchange Board of India (SEBI) on August 10 to disclose the exemption letter it granted to ICICI Securities, which allowed the firm to bypass the reverse book-building process required for delisting. This order came as a result of a challenge from Aruna Vinod Modi, an ICICI Securities shareholder who questioned the validity of the exemption granted. The court’s ruling mandates SEBI to provide the letter to Modi, but she is restricted from sharing or reproducing it, and must not permit third-party access.
Modi’s legal challenge alleges that SEBI exceeded its regulatory authority by granting this exemption, which she argues contravenes the delisting regulations. The case is part of a broader legal dispute concerning ICICI Securities’ planned delisting from Indian stock exchanges. The National Company Law Tribunal (NCLT) is also examining claims that ICICI Bank improperly influenced shareholders to support the delisting. Notably, 83.8% of public institutional shareholders and 32% of non-institutional shareholders voted in favour of the delisting.
Shareholders contend that ICICI Bank employees, rather than ICICI Securities staff, were involved in persuading public shareholders to vote for the delisting. They allege that ICICI Bank used presentations to exploit shareholders’ lack of expertise. The NCLT in Mumbai has previously dealt with similar complaints, prompting SEBI to issue an administrative warning against ICICI Bank’s outreach efforts.
SEBI’s warning criticized the bank’s role, noting that its involvement presented a conflict of interest and lacked impartiality. The regulator has instructed ICICI Bank to improve its compliance standards to prevent further issues and has indicated that further action may be taken if necessary.