MC Exclusive: Minority shareholders file class action suit against ICICI Securities on delisting concerns

Minority shareholders have also alleged that ICICI Securities has followed "illegal" methods to get the voting in their favour.

A group of minority shareholders led by investor Manu Rishi Guptha have filed a class action suit on Saturday with the National Company Law Tribunal against ICICI Securities on the delisting plan, sources said. More than 100 shareholders are a part of the class action suit.

As per section 245 of the Company Act 2013 such a suit  may be filed (where one or several persons join together and sue on behalf of a larger group of person) if they are of the opinion that the management or conduct of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors.

Moneycontrol had previously reported that the shareholders were contemplating legal action. The shareholders had raised concerns on due process not being followed, wrong valuation, and attempts of influencing shareholders to vote in favour of the delisting.

Also read: Minority shareholders contemplating action over ICICI Bank's delisting plan of I-Sec

According to the minority shareholders, the current valuation is based on a report from June 29, 2023. They allege that it is does not factor in the bull market run during the period and improved position of ICICI Securities.

In an April 10 note, Quantum Mutual Fund, a minority shareholder, had alleged that the valuation for ICICI Securities was done by comparing it to its peers. I-Sec has been valued at a 30-77 percent discount to its listed peers, based on the consensus earnings forecast for FY2024. Quantum notes that even if one were to take the lowest valuation of its peers, in this case, Angel One at 24x, the merger offer would have been at least 30 percent higher.

Also read: Quantum Mutual Fund votes against ICICI Bank and ICICI Securities merger

Illegal methods

The minority shareholders have also alleged that ICICI Securities has followed "illegal" methods to get the voting in their favour. The shareholders received calls allegedly made by ICICI Bank on behalf of ICICI Securities coaxing them to vote in favour of the merger scheme.

Guptha had previously told Moneycontrol that the actions have also led to minority shareholder data being compromised as the calls were made by ICICI Bank and not even by ICICI Securities, which means their details were shared with the bank.

"When I sought the shareholder register around 9 months ago, by paying the required fees and by following due process, I received only names and the email addresses. How do other people in the public domain get the phone numbers? We believe that obviously someone is not acting in the right manner," he said.

On March 28, in a board meeting, ICICI Securities had revealed that of the institutional investors 83.8 per cent voted positively, while in terms of retail investors only 32 percent of retail shareholders were in favour of the delisting.

(This is a developing story)

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