Last year in August and October, Mumbai and Ahemadabad benches of the National Company Law Tribunal (NCLT) approved applications filed by the ICICI Securities Ltd and ICICI Bank to delist the private sector lender’s securities company from the bourses.
The appellate tribunal ruled this in separate applications filed by the Quantum Mufutal Fund and individual shareholder Manu Rishi Guptha challenging the NCLT orders, that approved the delisting.
“Appellant has purchased shares of ICICI Securities even after the scheme was announced and the swap ratio was in the public domain it makes it obvious the appellant is not acting bona fide in raising objections to the Scheme but is indulging in speculative litigation,” observed the division bench of Justice Yogesh Khanna and a technical member Ajai Das Mehrotra in an appeal filed by Manu Rishi Guptha.
“Thus the contentions raised does not inspire us to set aside a reasoned order, hence all appeals are dismissed,” said NCLAT in its 12-page order.
ICICI Bank and ICICI Securities argued that the two applications filed against the brokerage house’s proposed delisting are opposed to the established principle of shareholder democracy and sought to dismiss the same. The bank and the brokerage house also argued that under Section 230 (4) of the Companies Act, only shareholders holding a minimum of 10% of the total shareholding of the company are eligible to object to a scheme of arrangement. The respondents further argued that two objectors Quantum Mutual Fund and an investor Manu Rishi Guptha hold 7,41,488 shares (0.010%) and 200 shares (0.0000% negligible shareholding) respectively in the bank. In two separate applications, Quantum Mutual Fund and an investor Manu Rishi Guptha have objected to the proposed delisting of ICICI Securities with the arguments that the swap adversely affects minority shareholders. Quantum Mutual Fund and Manu Rishi Guptha hold 0.08% and 0.002% of the paid-up equity share capital of ICICI Securities respectively.
Before the tribunal’s approval in August, the delisting proposal was approved by 93.82% in value of the equity shareholders of ICICI Securities. Further, 71.89% in value of the public shareholders also approved it which is well above the requisite threshold under applicable law.
In this case, Senior Counsels Arun Kathpalia and Krishnendu Datta appeared for ICICI Securities and ICICI Bank respectively, while advocate Viraj Parekh appeared for Quantum Mutual Fund and counsel Kausik Chatterjee argued for Manu Rishi Guptha.
