Sebi issues warning to ICICI Securities after inspection of books, records

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The Securities and Exchange Board of India has issued an administrative warning to ICICI Securities Limited on Friday. The company, in a regulatory filing, said that an administrative warning has been issued in connection with the inspection of books and records for the Merchant Banking activities of the Company conducted in the month of December 2023.
There is no impact on financial, operation or other activities of the Company pursuant to the above-mentioned administrative warning letter. ICICI Securities is a subsidiary of ICICI Bank, wherein the latter holds around 75% stake in the former.

It is to be noted that last year in June, ICICI Bank had proposed to delist ICICI Securities following board approval for the draft scheme of arrangement.

Following the delisting, ICICI Securities will again become a 100% subsidiary of ICICI Bank.

The decision to make ICICI Securities a wholly-owned subsidiary through delisting was to drive synergies between the two entities, ICICI Bank had earlier said.

The company had said the delisting of shares of ICICI Securities will be done through a share swap, wherein public shareholders of the brokerage will be allotted 67 shares of ICICI Bank for every 100 shares held.

ICICI Securities made its stock exchange debut in April 2018. ICICI Bank had sold part of its stake in the brokerage firm in the IPO.

Earlier today, Quantum Mutual Fund voted against the proposed merger of ICICI Bank and ICICI Securities citing losses of Rs 6.08 crore to its own unitholders if the merger goes through. The fund house said its Quantum Long Term Equity Value Fund (QLTEVF) and Quantum ELSS Tax Saver Fund (QETSF) own shares in ICICI Bank and ICICI Securities.

As per Quantum’s estimates, the net loss to ICICI Securities’ minority shareholders will be to the tune of Rs 1,776.70 crore.

In January, the Ahmedabad Bench of the National Company Law Tribunal cleared ICICI Bank’s proposed plan of arrangements with ICICI Securities and directed it to conduct an EGM on March 27 to seek approval from shareholders.

Shares of ICICI Securities Ltd closed at Rs 751.80, down by 1.18 per cent.

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