Market regulator Securities and Exchange Board of India (Sebi) today passed an order against promoters and directors of consumer goods firm Gillette India for failing to comply with the 25% minimum public shareholding (MPS) requirement.
Sebi has said that there will be a direct freeze on voting rights and corporate benefits, including dividends, of promoters of Gillette—US-based Procter and Gamble (P&G) and Indian promoters Poddar group— till the promoter holding in the company falls to 75%.
Currently, the promoter holding in Gillette stands at 88.76%, while the freeze will be on about 48% of the holding.
Gillette's appeal against Sebi for rejecting its proposal to complying with MPS was dismissed by the Securities Appellate Tribunal (SAT) on Wednesday. The tribunal had also vacated the interim relief it had granted to the company for complying with the public shareholding requirement, the deadline for which has ended on June 3.
Sebi has also barred the promoters of the company from dealing in the securities of Gillette India and also restrained the promoters and directors from taking up any new position as director in any listed company.
The order passed against Gillette India is similar to the one Sebi had passed against 105 companies on June 4 for failing to comply with the MPS requirement.