Sebi warns ICICI Bank over outreach program for I-Sec delisting, calls action 'inappropriate'
In an administrative warning issued on Thursday, SEBI directed ICICI Bank to thoroughly examine the complaints received directly or through the SCORES portal for any violations of the guidelines of the outreach program by officials of the bank and take appropriate action against such officials.
The , the Securities and Exchange Board of India (), reprimanded for conducting an outreach program in March to influence of during the voting on the scheme of arrangement for delisting the equity shares of the broking firm.In an issued on Thursday, SEBI directed to thoroughly examine the received directly or through the SCORES portal for any violations of the guidelines of the outreach program by officials of the bank and take appropriate action against such officials. SEBI also instructed the bank to place a report on the actions taken before the board and forward it to SEBI within ten days of the board meeting.
The e-voting for the delisting of ICICI Securities, which started on March 22, ended on March 26. During this period, shareholders of ICICI Securities claimed on social media that the bank’s executives contacted them directly, asking them to vote in favour of the resolution that proposes to delist the broking subsidiary.
The regulator said it has observed that the undertaken by the bank was inappropriate.
“Your Bank, being a promoter/ interested party, providing its perspective on the proposed transaction to shareholders of I-Sec cannot be said to be providing a balanced, factual position. There was a clear conflict of interest as your bank is the promoter with more than 74 % shareholding in I-Sec and an interested party in the transaction,” Sebi's warning letter said.
Shareholders shared screenshots of call details and WhatsApp messages from bank staff with some of them alleging that executives asked them to share the One Time Password (OTP) in the . Some said the bank executives also asked ICICI Sec shareholders to share the screenshots of their voting.
“This has been viewed seriously. You are, therefore, warned to be careful in future and improve your compliance standards to avoid the recurrence of such instances, failing which action may be initiated in accordance with the provisions of the SEBI Act, 1992, and the Rules and Regulations framed thereunder.” Sebi said in its warning letter.
ICICI Bank, in its response to the regulator’s query, said that I-Sec and the bank had undertaken an outreach programme with the purported objective of maximising participation of I-Sec shareholders in the voting process and that I-Sec has shared the data of its shareholders with the bank on request.
“The outreach was done in the face of a 'concerted campaign' on social media by some sophisticated shareholders of ICICI securities against the scheme,” the bank told the regulator.
Public shareholders of both ICICI Bank and ICICI Securities have approved the scheme of arrangement in which the bank aims to delist ICICI Securities, through a share swap deal. As per the terms, for every 100 shares held, public shareholders in ICICI Securities would receive 67 shares of ICICI Bank.
The share swap ratio for delisting the brokerage has been opposed by a section of minority shareholders who have filed a class action suit with the Delhi bench of the National Company Law Tribunal (NCLT).
Source: Stocks-Markets-Economic Times
