The Securities and Exchange Board of India (Sebi) has pulled up ICICI Bank for using its employees to try and persuade shareholders of ICICI Securities to vote in favour of a scheme of arrangement to delist the stock from the bourses.
Shareholders of I-Sec had approved the plan in March.
The market watchdog has issued an “administrative warning” through a letter issued on June 6 asking the bank to stop such outreach initiatives in future that were designed to influence shareholders to vote in a certain manner.
In its letter, Sebi said it had received several complaints from shareholders of I-Sec alleging that they were being badgered by calls and messages from the officials of ICICI Bank to vote in favour of the delisting scheme. The shareholders said they had also been asked to send screen shots of their vote.
Sebi said it was taking a very serious view of the outreach programme which it dubbed “inappropriate”.
“You are, therefore, warned to be careful in future and improve your compliance standards to avoid recurrence of such instances, failing which action may be initiated in accordance with the provisions of Sebi Act, 1992 and the rules and regulations framed thereunder,” Sebi added.
ICICI Bank submitted to the market regulator that both I-Sec and the lender had undertaken an outreach programme with the objective of maximising participation of I-Sec shareholders in the voting process and that I-Sec has shared the data of its shareholders with ICICI Bank,
It added that the outreach was done to counter a ‘concerted campaign’ launched through social media by some sophisticated shareholders of ICICI Securities who were trying to scuttle the delisting.
ICICI Bank also disclosed that certain guidelines in the form of do’s and don’ts were stipulated to its officials who were undertaking the outreach programme.
“While your bank has submitted that the outreach programme was undertaken merely to explain the scheme and for maximising shareholders’ participation, however based on the examination of the investor complaints, it was observed that some of the officials of your bank have gone beyond the programme by making repeated calls, asking for screenshots of voting etc,’’ Sebi said in its letter.
