The investigation was prompted after multiple complaints from I-Sec shareholders. These complaints alleged that ICICI Bank officials had made numerous calls and sent messages urging shareholders to vote in favour of the delisting scheme. Some shareholders were even asked to provide screenshots of their votes. Upon examination, Sebi found that ICICI Bank officials had indeed gone beyond a mere outreach programme.
The markets regulator found that ICICI Bank’s outreach programme – intended to maximize shareholder participation – was excessively persistent. It involved repeated calls and requests for voting screenshots from shareholders. Additionally, officials were recorded informing shareholders that opting for the delisting scheme would be beneficial. This raised concerns about a conflict of interest, as ICICI Bank holds over 74% shareholding in I-Sec, making it a major promoter. Sebi also criticised the heightened outreach efforts on the last day of voting, including during holidays and weekends, as inappropriate.
The bank’s justification for assisting shareholders who were supposedly unaware of the e-voting process was deemed unnecessary by Sebi. This overreach by ICICI Bank officials went beyond the remit of the outreach programme and raised significant regulatory concerns Shareholders of ICICI Bank and its subsidiary, ICICI Securities, have approved the proposal to convert the latter into a wholly-owned subsidiary. As of March 2024, ICICI Bank held 74.7% ownership of its securities arm, while public shareholders held the remaining 25.3% following an IPO in 2018.
Despite resistance from a section of retail investors, the proposal garnered significant support from institutional shareholders, resulting in 72% of public shareholder votes favouring the proposal and surpassing the required two-thirds majority.
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