In a significant move that marks a strategic shift in the financial landscape, shareholders of ICICI Securities have overwhelmingly voted in favor of the proposed merger with its parent company, ICICI Bank. Despite facing significant backlash from minority shareholders, the merger resolution garnered strong support, paving the way for ICICI Securities to become a wholly-owned subsidiary of ICICI Bank.
The decision, backed by more than 70% of the votes, follows a National Company Law Tribunal (NCLT) order and underscores a pivotal moment in the evolution of both entities. The meeting, attended by 161 equity shareholders and their representatives, witnessed robust backing for the merger proposal, with 48,917,332 votes in favor out of a total of 68,048,133 cast by public shareholders.
Following the announcement, ICICI Securities’ shares experienced a decline of over 4% on the Bombay Stock Exchange, contrasting with a 1.6% rise in ICICI Bank’s shares. The proposed delisting scheme stipulates that ICICI Securities shareholders will receive 67 shares of ICICI Bank for every 100 shares held, marking a significant structural realignment in the financial sector.
ICICI bank Merger
However, the approval hasn’t come without its share of controversies. Before the resolution was passed, ICICI Bank faced considerable backlash from minority shareholders, particularly retail investors who voiced concerns over alleged attempts by bank executives to influence the voting process. Reports surfaced indicating direct contact between ICICI Bank employees and retail shareholders, raising questions about the fairness and transparency of the delisting process.
Icici securities voting for the merger with Icici bank: this has been passed. Of 8 cr non promoter shares, 6.8 cr voted.
5 cr shares with institutions of which 83% voted for the merger
1.5 cr shares with retail/hni and 67% voted against.
Passes with 71% majority. pic.twitter.com/QhX99t9iK7
— Deepak Shenoy (@deepakshenoy) March 28, 2024
The stock exchanges sought clarification from both ICICI Securities and the Bank in response to these allegations, highlighting the need for greater scrutiny and oversight in corporate decision-making processes. Quantum Mutual Fund, a minor stakeholder in ICICI Securities, openly opposed the proposal, citing potential adverse impacts on its unitholders. The fund estimated a net loss of at least Rs 6.08 crore, arguing that IBank’s proposal undervalued ICICI Securities and favored the bank’s interests over those of minority shareholders.
Despite these challenges, the resounding approval of the merger underscores broader shifts within the financial industry and sets the stage for a new chapter in the collaboration between ICICI Securities and ICICI Bank. However, it also raises pertinent questions about corporate governance, shareholder rights, and the need for transparency in corporate decision-making processes, echoing broader conversations about accountability and fairness in the financial sector.
