After being rejected by the National Company Law Tribunal (NCLT), Quantum Mutual Fund has filed an appeal with the National Company Law Appellate Tribunal (NCLAT) against delisting of ICICI Securities from the stock exchanges through the proposed merger with its parent ICICI Bank.
Last month, the NCLT approved the ‘scheme of arrangement’ for delisting of shares of ICICI Securities and rejected objections raised by minority shareholders Quantum Mutual Fund and Manu Rishi Gupta.
As per the scheme of arrangement, shareholders of ICICI Securities will get 67 shares of ICICI Bank for every 100 shares they hold.
In March, ICICI Securities shareholders have approved the company’s merger proposal with ICICI Bank. However, a majority of retail shareholders voted against the proposal.
The result showed that 71.89 per cent of shareholders voted for the delisting. While 83.8 per cent of institutional investors voted in favor of the delisting, only 32 per cent of non-institutional retail shareholders favored it.
Following delisting, ICICI Securities will become a wholly-owned subsidiary of the bank.
Grounds for objection
Ajit Dayal, Founder, Quantum Advisors, Sponsor of Quantum AMC, on Wednesday said the scheme of arrangement proposed by ICICI Bank to acquire the 25 per cent of shares of its listed subsidiary ICICI Securities via a share swap is a breakdown of every known norm in corporate governance.
In April, Quantum Mutual Fund listed out four major grounds for objecting the scheme — concerns over valuation, alleged fraudulent means used by ICICI Bank to gather votes, conflict of interest of independent directors and violation of delisting norms.
Quantum MF is a minority shareholder and owns shares in ICICI Bank and ICICI Securities through its Quantum Long Term Equity Value Fund and Quantum ELSS Tax Saver Fund.
At that time of the NCLT case, the fund house had estimated that the merger would result in a net loss of at least ₹6.08 crore to its unit holders.