The Securities Appellate Tribunal has adjourned to June 12 a case related to Gillette India on the issue of complying with the market regulators minimum shareholding norms.
The male grooming products maker had early this year appealed to the tribunal against the Securities and Exchange Board of India for rejecting its proposal to comply with the latter’s minimum public shareholding requirement.
While hearing the case, the tribunal asked SEBI not to take any action against the multinational firm, promoted by personal care major Procter and Gamble, till the matter was disposed even though the deadline for complying with the shareholding norms expires on June 3. According to the minimum public shareholding norms, which SEBI issued in June 2010, the promoters of all listed companies in the country are supposed to reduce their stakes to 75 per cent by June 3.
Gillette India, in its proposal to SEBI, had mentioned that in a bid to bring down the promoter holding to 75 per cent, the Indian promoters (S. K. Poddar group) would transfer 4 per cent stake to the foreign parent P&G and then the latter will sell 4.9 per cent through the OFS (offer-for-sale) route. Currently, the promoters hold 88.76 per cent in Gillette India.
SAT, a quasi-judicial body that hears matters related to SEBI, has directed the market regulator to file a reply within 10 days and suggested that it can approve Gillette’s proposal with some minor tweaks. Apparently, the regulator has cancelled Gillette India’s proposal without giving any valid reasons.
Meanwhile, counsel appearing on behalf of SEBI said the promoters are first doing an inter-se transfer (transfer between promoter entities) and then selling the rest in the market. To this, the company has argued that in this process one of the promoters, S.K. Poddar, had given up his controlling stake and has stepped down from chairman’s post, which is in line with SEBI regulations.
On Thursday, shares of Gillette India closed at Rs 2,146, up 1.42 per cent on the BSE.