In a ruling on Wednesday, the court directed the Securities and Exchange Board of India (Sebi) to provide the petitioner-ICICI Securities shareholder Aruna Vinod Modi-with a copy of the exemption letter, subject to a non-disclosure undertaking. The investor had moved the court, contesting Sebi’s decision to grant parent ICICI Bank relaxation from rules on delisting the broking firm.
According to the court’s directions, the petitioner must undertake not to share any part of the exemption letter with any party. This includes not showing or allowing any party to inspect the letter or reproduce any part of it in any manner. Sebi did not respond to ET’s query.
Last month, Modi had challenged Sebi’s decision to grant ICICI Securities a relaxation from the delisting rules. Modi filed a writ petition arguing that Sebi acted beyond its jurisdiction by granting the exemption. She contended that Regulation 42 of the delisting regulations does not allow Sebi to grant any relaxation or exemption concerning substantive requirements.
In the petition, Modi argued that exemptions under the delisting regulations apply only if both the listed subsidiary and the holding company are in the same line of business. Since ICICI Securities is a stockbroker and ICICI Bank is a commercial bank, this exemption should not apply, Modi’s petition said.In March, public shareholders of both ICICI Bank and ICICI Securities approved the scheme of arrangement in which the bank aims to delist ICICI Securities through a share-swap deal. As per the terms, for every 100 shares of ICICI Securities, public shareholders would receive 67 shares of ICICI Bank.Some minority shareholders of ICICI Securities are opposed to the delisting bid as they feel the share-swap ratio offered by ICICI Bank for the merger is unfavourable to them.The petition noted that Sebi did not provide a copy of the relaxation order granted to ICICI Securities on June 20, 2023, despite multiple requests. According to the petition, Sebi’s step to relax delisting rules in this case could encourage more companies to misuse the delisting regulations.