The Securities and Exchange Board of India (SEBI) is probing allegations that ICICI Bank employees contacted shareholders of ICICI Securities to sway their votes before a pivotal shareholder meeting in March.

What Happened: More than 500 ICICI Securities shareholders organised via WhatsApp and social media to file about 70 complaints with SEBI, Mint reported, citing sources.

The source said SEBI is currently reviewing multiple complaints and will launch an investigation when sufficient evidence is gathered, though it is unclear exactly what actions SEBI will take.

A fund manager based in Bangalore and a minority shareholder in ICICI Securities told the publication that investors had lodged 60-70 complaints with SEBI and also raised concerns on the SCORES platform. These complaints primarily focus on alleged breaches of shareholder data privacy by ICICI Securities and the valuation used for the delisting.

Over 100 ICICI Securities shareholders have filed a class action suit with the National Company Law Tribunal (NCLT) against ICICI Bank’s proposal to delist ICICI Securities.

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Unsavoury Tactics: Several small shareholders of ICICI Securities had previously alleged that ICICI Bank employees had contacted and tried to influence them before the March shareholder meeting, where the decision to delist the company was made and merge it with ICICI Bank.

BSE and NSE sought clarification from both ICICI Bank and ICICI Securities, while experts highlighted concerns about data privacy and corporate governance breaches.

In response, both companies stated that they contacted shareholders to explain the proposed scheme and the e-voting process to enhance voter participation. They noted an overlap between shareholders and retail customers of the two entities but did not elaborate on how ICICI Bank employees obtained the personal information of ICICI Securities shareholders.

Some shareholders expressed surprise at how the bank acquired their contact details, as they had no dealings with ICICI Bank or ICICI Securities.

Valuation Issue: Minority shareholders voted in favour of delisting ICICI Securities on March 27, making it a 100% subsidiary of ICICI Bank. The bank owns 74.73% of the brokerage firm, with the remainder held by public shareholders. However, many retail shareholders disagreed with the valuation at which ICICI Securities was delisted.

ICICI Bank and ICICI Securities maintained that the valuation was determined by independent valuers and endorsed by independent experts. Despite this, some shareholders argued that the delisting valuation was significantly lower than the listing valuation.

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