ICICI Securities Limited has reached a settlement with the Securities and Exchange Board of India (SEBI) to resolve a case involving alleged regulatory violations. The settlement was finalized with ICICI Securities agreeing to pay ₹69.82 lakh. SEBI conducted an inspection of ICICI Securities' activities from September 22 to September 23, 2022. The inspection was part of SEBI's...
ICICI Securities Limited has reached a settlement with the Securities and Exchange Board of India (SEBI) to resolve a case involving alleged regulatory violations. The settlement was finalized with ICICI Securities agreeing to pay ₹69.82 lakh.
SEBI conducted an inspection of ICICI Securities' activities from September 22 to September 23, 2022. The inspection was part of SEBI's routine monitoring to ensure compliance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and the SEBI (Merchant Bankers) Regulations, 1992 (MB Regulations).
Regulation 24(3) of ICDR Regulations mandates that merchant bankers must ensure that the objectives of a public issue are substantiated with adequate documentary evidence.
Additionally, Regulation 13 of MB Regulations, which, when read with Clause 4 of Schedule III, addresses the accuracy and reliability of site visit reports.
The inspection report identified several non-compliances related to the company's due diligence processes. The report noted issues with site visit reports and the lack of adequate documentary evidence supporting the objectives of public issues managed by ICICI Securities. Additionally, there were discrepancies between statements made in the Draft Red Herring Prospectus (DRHP) and related news articles regarding the objectives of some issues.
In response to the findings, ICICI Securities submitted a settlement application to SEBI on November 9, 2023. The application sought to resolve the adjudication proceedings without engaging in protracted litigation. SEBI's Internal Committee recommended a settlement amount of ₹69,82,500/-, which was later approved by the High Powered Advisory Committee (HPAC) and the Panel of Whole Time Members (WTMs) of SEBI.
ICICI Securities agreed to this amount as a part of the settlement. The company also committed to taking appropriate action against any officers found to be at fault and to notify SEBI about these actions.
In addition to resolving the regulatory case, ICICI Securities is seeking to delist from the stock exchanges as part of a broader restructuring plan. According to the proposed scheme of arrangement, ICICI Securities shareholders will receive 67 shares of ICICI Bank for every 100 shares they hold.
SEBI's settlement order is a formal acknowledgment of the resolution of the regulatory issues raised against ICICI Securities. However, SEBI retains the right to revisit the settlement terms if it finds any discrepancies or breaches in the future.
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