ICICI Securities: I-Sec’s minority investors file suit challenging delisting process

Mumbai: Minority shareholders of ICICI Securities (I-Sec) led by Bengaluru-based investment manager Manu Rishi Gupta have filed a class action suit with the Delhi bench of the National Company Law Tribunal (NCLT) against ICICI Bank’s bid to delist its broking arm. The private lender’s scheme of arrangement to delist ICICI Securities received approval from the subsidiary’s public shareholders in a voting process last month.

Gupta has confirmed filing the suit under Section 245 of the Companies Act, stating that more than 100 investors have already consented to take legal action to halt the delisting process. He mentioned that more investors are joining each day to support the legal battle.

“Our primary contention is to question the process followed for delisting, mismanagement during the voting process, the oppression of minority shareholders through the valuations at which the swap ratio was decided, and moreover, how ICICI Bank has broken Sebi’s principle of trust,” he said.

According to Section 245 of the Act, if the management or conduct of a company’s affairs is being carried out in a manner prejudicial to the interests of the company, its members, or depositors, a suit may be filed on behalf of the shareholders aggrieved by such actions. This suit can be initiated by at least 100 shareholders or at least one-tenth of the total shareholders, whichever is less, or those holding at least 10% of the issued share capital.

Quantum Mutual Fund, which has openly opposed the delisting, is also considering legal action against the bank.