The Securities Appellate Tribunal (SAT) today directed the market regulator, Securities and Exchange Board of India (Sebi), to give a reasoning for turning down Gillette India's proposal on meeting the minimum public shareholding requirement.
The razor and skin care multinational major's Indian arm moved SAT after its 'sell down' proposal didn't find favour with Sebi.
Details of its proposal are yet to be made public. One aspect of the plan, explained to the tribunal today, was that S K Poddar, chairman, would cease to be a promoter. Following this, he'd be free to sell his eight per cent shareholding in the company freely.
Currently, the promoter holding is 88.76 per cent and it needs to be brought down to 75 per cent before June.
Gillette had approached Sebi by a letter dated October 10, 2012, on what it had proposed. Sebi's reply, dated November 7, said the transactions proposed were not an acceptable means of achieving the minimum public shareholding requirement.
SAT presiding officer P K Malhotra today remanded the matter back to Sebi for passing a 'reasoned order, while making it clear the tribunal hasn't taken any view based on the merits of the case.
Gillette's grievance was that its request was "summarily rejected without assigning any reasons".
In a letter to the Bombay Stock Exchange earlier this month, it had said, "The company's promoters are fully geared to implement the sell-down proposal compliant with securities' regulations and had sought Sebi's endorsement and confirmation that implementing the sell-down proposal would constitute compliance. Details of the proposal are not being discussed in the public domain, since the matter is now sub judice."