ICICI Securities-shareholder spat could land in Bombay HC
ICICI Securities is likely to reach the Bombay High Court soon. The Mumbai bench of the National Company Law Tribunal (NCLT) clarified that it lacks authority to judge the legality of the exemption granted by the Securities and Exchange Board of India (Sebi) for delisting the broking firm without the reverse book-building process. It also indicated that the matter must be moved to the appropriate forum.
Senior counsel Kaushik Chatterjee, who represented the shareholders before the NCLT, argued that the Sebi has illegally granted an exemption to ICICI Securities under Section 37 (1) of the Delisting Regulations. This exemption allows ICICI Securities to delist its shares from the bourses without going through the reverse book-building process despite the requirement that the listed holding company and the listed subsidiary be in the same line of business, he said.
«No one has seen the exemption letter as both the Sebi and ICICI Securities have refused to share the letter with shareholders,» said Chatterjee. «So, we are not left with any choice except to move High Court Mumbai to challenge the legality of exemption granted by Sebi to both the companies from not being in the same line of business.»
ICICI Securities on Tuesday argued that two applications filed against the company's proposed delisting were in complete derogation of the principle of shareholder democracy and sought to get them dismissed. ICICI Securities argued that the proviso to Section 230(4) of the Companies Act provides that any objection to a
