Amid the backlash for reportedly trying to sway shareholders to vote in favour of a proposal to delist its subsidiary ICICI Securities, ICICI Bank has defended its action, citing concerns from “a concerted campaign against the proposal” by those opposed to the scheme.
In a clarification issued to exchanges, ICICI Bank said that along with ICICI Securities, it had been undertaking efforts to reach out to equity shareholders with a view to explain the proposed scheme of delisting
ICICI Securities and merging it with the parent entity.
It said the primary objective of this outreach was "maximising participation in the vote." "The approach in the outreach was to explain the proposed Scheme and facilitate voting, and to not pursue repeated engagement if declined by the shareholder," ICICI Bank said.
"As may be seen from the voting period dates mentioned above, March 23 (Saturday), March 24 (Sunday) and March 25 (Holi), were holidays in all or substantial parts of the country. Accordingly, the outreach activity was relatively high on March 26 (Tuesday)," it clarified.
ICICI Bank added that a "concerted campaign" was undertaken by those opposed to the proposed scheme, using social media and involving extensive outreach to retail shareholders, and hence the bank "felt it was important to reach out to retail shareholders to maximise participation in and to facilitate a considered outcome of, the vote."
As per the bank’s regulatory filing late on March 27, shareholders have approved a proposal to delist ICICI Securities, following which it will become a wholly-owned subsidiary of ICICI Bank. It said that 83.8% of the institutional shareholders and 32% of non-institutional shareholders voted in favour of the delisting, while 67.8% of public non-institutional shareholders voted against the proposal.
The resolution was passed even as shareholders of ICICI Securities took to X platform (formerly Twitter) to complain about the relentless calls from ICICI Bank's managers and branch officers, asking them to confirm if they voted and to share their email confirmation of the vote.
Deepak Shenoy, CEO of CapitalMind posted the following message on X on March 26, "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 ISEC they couldn't vote. So they have called shareholders and asked them to vote...pushing for an approval. This might be legal, but it leaves a bad taste, esp 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, @ICICIBank."
On 25 June 2023, ICICI Securities announced its delisting plan through a scheme of arrangement, under which shareholders of ICICI Securities would receive 67 shares of ICICI Bank for every 100 shares they held. Upon successful implementation, ICICI Securities would operate as a wholly-owned subsidiary of
ICICI Bank. As of December 31, 2023, ICICI Bank held 74.77% of the equity shares of ICICI Securities and the remaining 25.23% equity shares were held by the public.
In the exchange clarification issued today, ICICI Bank said that the share exchange ratio for the proposed Scheme was as per the joint valuation exercise conducted by two independent valuers. Two merchant bankers have delivered independent fairness opinions to ICICI Bank and ICICI Securities separately, it said.
"ICICI Bank and ICICI Securities received no adverse observations/ no-objection letters regarding the Scheme from NSE and BSE on November 28, 2023, and November 29, 2023, respectively. Four independent proxy advisory firms recommended voting for the resolution to approve the proposed Scheme to shareholders of both ICICI Bank and ICICI Securities," ICICI Bank added in its note to exchanges.
