The Rajasthan High Court today issued notices to the Reserve Bank, Bank of Rajasthan, ICICI Bank and others on a petition filed by an employees union of the Udaipur-based bank against its proposed merger with the country's largest private sector lender.
"The High Court issued notices to all respondents--the Union of India, Reserve Bank, Sebi, BoR, ICICI Bank, PK Tayal and SK Tayal (BoR promoters)," said lawyer Varun Sinha, who filed the petition on behalf of the Akhil Bharatiya BoR Karamchari Sangh.
The respondents have been asked to file their replies within four weeks after which the matter will be posted for hearing.
The BoR Karamchari Sangh is seeking to stay the proposed merger of the bank with the ICICI Bank, Sinha added.
The petition claims that the BoR board decision on May 18, 2010 to merger with ICICI Bank was illegal as Sebi had found out that the Tayals had acquired 55.1 percent equity in the bank in violation of its regulations.
Sebi in its order on March 8, 2010 had restrained the Tayals and their group entities from dealing in BoR shares.
"Then the merger on the basis of the share swap ratio method is in contrary to the Sebi order," Sinha said.
ICICI Bank on May 23, 2010 had agreed to take over BoR in a share-swap deal that valued the BoR at over Rs 3,000 crore. The merger would be based on ICICI giving one share for every 4.72 shares of BoR.
Post-merger, the balance sheet of ICICI Bank would cross Rs 4 lakh crore. BoR has a total business of over Rs 23,000 crore, as against nearly Rs 3,84,000 crore of ICICI Bank.