HSIL drags I-Sec to Delhi HC over April 28 research report

ICICI Securities, which was dragged by sanitaryware manufacture HSIL to Delhi High Court over April 28 research report, has conveyed to all concerned including its clients that its addendum report of May 6 be substituted for the first.

At the same time, this research house has taken a stance that it has no intention of withdrawing its report on ‘Sanitaryware‘ while standing by its May 6 version, ICICI Securities said. The matter is still sub judice and the Delhi Hight Court has placed the next hearing for July 20 on the matter, said it is learnt.

HSIL has sued ICICI Securities for an April 28, 2020, report that put Jaquar as India’s No 1 sanitaryware brand. This is among the rare instances where a research house has been dragged to court for a research report for alleged defamation and disparagement of a company’s product, say industry observers.

HSIL (now Brilloca Ltd post demerger) contended before the Delhi High Court that the ICICI Securities report of April 28 was based on complete falsehood to substantially lower and damage the reputation and goodwill of the company. It was highlighted that the said report was also uploaded by Jaquar & Company Pvt Ltd on its LinkedIn account.

After HSIL took up the matter with ICICI Securities, the latter had on May 6 published an addendum (second report) to the first. With ICICI Securities not withdrawing its April 28 report, HSIL moved the court earlier this month. The ICICI Securities first report was titled ‘Jaquar pips HSIL, become India’s No 1 sanitaryware brand’.

Stock exchange filing

The court has directed ICICI Securities to communicate to all concerned that it was substituting the first report with the second one, HSIL said in a regulatory filing to the stock exchanges on Thursday. The court has also in an order directed the deletion of the April 28 report from LinkedIn by Jaquar & Company, the stock exchange filing added.

A spokesperson for ICICI Securities said that research house stands by its May 6 report, which had removed some qualitative mentions of the earlier report.

The controversial report noted that in just nine years of its existence in the sanitaryware segment, the undisputed market leader in faucets — Jaquar has achieved what took several decades for the old timers on this segment. “Our checks suggest Jaquar has piped HSIL in FY20 to become India’s leading brand in the sanitaryware segment. The market share losers in the segment include HSIL and CERA, to some extent. Besides Jaquar ( which has seen its market share rising to 15 per cent in sanitaryware segment), Parryware Roca was another notable market share gainer in last fiscal,” the first report highlighted.

However, its May 6 research report had been modified to state ‘Jaquar sustains growth momentum in testing times’. It also made qualitative modifications to the earlier report and removed all references to HSIL in the initial paragraph of the report.