ICICI Bank is under fire for reportedly trying to sway minority shareholders into voting for the delisting of ICICI Securities.
ICICI Bank is looking to merge its 75 percent subsidiary ICICI Securities with itself. The lender is offering investors 0.67 shares of ICICI Bank for every one share in ICICI Securities.
However, shareholders of ICICI Securities have taken to X platform (formerly Twitter) to complain about the relentless calls received from ICICI Bank's managers and branch officers.
Users reported that employees of the bank have been contacting retail shareholders in an attempt to sway the voting process. ICICI Bank executives have contacted shareholders to confirm if they have cast their vote on the delisting process. Further, they have asked stakeholders to share their email confirmation of the vote.
"ICICI Bank has been a little too aggressive in canvassing votes for their merger into ICICI Securities. As a majority holder and interested party in ICICI Securities, they couldn't vote. So they have called shareholders and asked them to vote... pushing for an approval," said Deepak Shenoy, CapitalMind founder and CEO, on X.
He added, "This might be legal, but it leaves a bad taste, especially asking for email confirmations of the votes. We own a position in the bank but it doesn't look good to do this, plus could call for SEBI action on undue influence. Kindly refrain, ICICI Bank."
At 11.15 am on March 27, ICICI Bank shares were in the green, at Rs 1,085.8 apiece, higher by 0.15 percent on the NSE. Shares of ICICI Securities were trading flat at Rs 738.5 per share.
Also Read | Quantum Mutual Fund votes against ICICI Bank and ICICI Securities merger
Additionally, there were complaints of the delisting proposal being unfair to minority shareholders. "We believe that the delisting scheme is unfair to minority shareholders, as this swap ratio of 2:3 significantly undervalues ICICI Securities compared to its historical performance and market positioning," said Manu Rishi Gupta, founder of MRG Capital.
"As per the scheme, ISEC shareholders will be required to surrender their ISEC shares - and will in exchange receive ICICI bank shares in the proportion of two ICICI Bank shares for every three ISEC shares - that is, at an effective price of around Rs. 730 per share – a mere 40% higher than the IPO price, while profits have climbed multi-fold since the IPO," added Gupta.
Shareholders have also asked the market regulator SEBI to take a closer look at the actions committed by the lender. "Looks like [ICICI Bank is] expecting the voting to go against them. Hopefully SEBI will take note of this" said one user.
Quantum Mutual Fund, which holds a minor stake in ICICI Securities, voted against the proposal saying that the move would be detrimental to the interests of the fund house’s unitholders.
Quantum Mutual Fund estimates that the merger will result in a net loss of at least Rs 6.08 crore to its unitholders. In its rationale, the fund house believes that ICICI Bank's proposal undervalues ICICI Securities (ISEC) and gives ICICI Bank access to the full business of ISEC at a less than the fair market price.
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