SEBI Issues Administrative Warning to ICICI Bank Over Employee Influence in ICICI Securities Delisting

The market regulator, SEBI received complaints from shareholders about receiving calls from ICICI Bank, urging them to vote in favor of delisting ICICI Securities. These calls have raised concerns among the shareholders regarding the appropriateness and ethics of such direct lobbying efforts by the bank to influence the voting outcome on the proposed delisting of its subsidiary, ICICI Securities.

SEBI Warns ICICI Securities

The Securities and Exchange Board of India (SEBI) has issued an administrative warning to ICICI Bank for attempting to influence shareholders to vote in favor of delisting ICICI Securities. In a letter dated June 6, SEBI highlighted that it had received numerous complaints from ICICI Securities (I-Sec) shareholders. These complaints alleged that they had been contacted multiple times by ICICI Bank officials via calls or messages, urging them to support the delisting scheme. Additionally, the shareholders claimed they were asked to provide screenshots of their voting. SEBI’s letter emphasized the impropriety of such actions and served as a formal caution to the bank regarding the ethical implications and regulatory violations involved in such attempts to sway shareholder decisions.\

SEBI has said that there was a clear conflict of interest from the bank’s side as it is the promoter with more than 74% shareholding in ICICI Securities which makes it an interested party in the transaction. 

ICICI Securities Delisting

In late March, ICICI Securities secured minority shareholder’s approval for the delisting of the srock with 72% of the minority shareholders in favor of the delisting, After the delisting ICICI Securities is set to merge with its parent company, ICICI Bank, becoming a wholly-owned subsidiary once more after a six-year separation. Shareholders of ICICI Securities will receive 67 shares of ICICI Bank for every 100 shares they hold in the brokerage firm.

Conclusion: The recent SEBI warning to ICICI Bank highlights concerns over alleged attempts to influence shareholder votes. The merger of ICICI Securities with its parent company, ICICI Bank, remains a significant milestone, with shareholders of ICICI Securities set to receive 67 shares of ICICI Bank for every 100 shares held in the brokerage. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.