Sebi imposes a fine of Rs 12 lakh on the ICICI Bank, compliance officer for disclosure failures

New Delhi, September 12 () Capital market regulator Sebi imposed a total fine of Rs 12 lakh on Thursday on ICICI Bank Ltd and its compliance officer Sandeep Batra for disclosure failures, including late disclosure of the agreement binding signed with the Bank of Rajasthan.

The regulator during an investigation discovered that on May 18, 2010 a binding implementation agreement was signed between the ICICI Bank and the Bank of Rajasthan to obtain the cooperation and support of the dominant shareholders of the Bank of Rajasthan to make the proposal of its Merger with private lender.

The investigation revealed that ICICI Bank did not disclose information about the signing of the binding agreement to the stock exchanges in a timely manner.

It was noted that the agreement was signed between the banks on May 18, 2010 at approximately 4:30 a.m., but ICICI Bank disclosed the exchanges at 8:10 p.m. stock markets.

Therefore, the lender delayed the disclosure on a trading day, Sebi said in an order.

The binding agreement was an appropriate formal legal agreement and a crucial step to effect the merger of the Bank of Rajasthan with the ICICI Bank. It also contained clauses on the share exchange relationship and the draft amalgamation scheme, among other information, Sebi added.

In addition, Sebi said that any information related to the merger, merger or acquisition of a publicly traded company is considered price-sensitive information. Therefore, at the time, the signing of the binding agreement is price sensitive information.

It was assumed that such information would be disclosed to the stock exchanges immediately.

However, by retaining such disclosure for a full day of negotiation, ICICI created a situation of information asymmetry in which the general public was not aware of such an agreement, Sebi said.

In doing so, the lender has violated the rules of the listing agreement, as well as the provisions of the Prohibition of insider trading regulations.

With respect to Sandeep Batra, the regulator said that being the compliance officer of ICICI Bank and also being aware of developments related to the signing of the binding agreement, he did not ensure that ICICI Bank complied with the requirements of making immediate disclosures and you continue on the binding agreement to the stock exchanges. Consequently, a total fine of Rs 10 lakh was imposed on ICICI Bank, while Sandeep Batra was fined Rs 2 lakh. SRS RVK