Gillette gets reprieve on holding norms, courtest SAT

MUMBAI: In a relief to men's grooming products maker Gillette India, the Securities Appellate Tribunal (SAT) has directed Sebi not to take any action against the company till the matter related to complying with the minimum public shareholding norms is heard and disposed of.

On Thursday, while listening to a plea filed by the Procter & Gamble-owned company, SAT asked Sebi to file its reply in 10 days. The tribunal will hear the matter on June 12, while the deadline for complying with the shareholding norms expires on June 3.

According to filings, promoters hold 88.76% in Gillette India. The company has proposed a three-stage plan to bring down the promoter holding to 75%. In the first step, the Indian promoters would transfer 4% stake to P&G at the permissible 25% premium while giving up control for consideration to this premium. Thereafter, it will terminate the shareholder agreement and, in the final stage, P&G will sell 4.9% through OFS.

"The approach involves one of the promoter entities giving up control while losing a lot of statutory rights and so the essence of the law is being followed in both, letter and spirit," argued Somasekhar Sundaresan, while appearing for Gillette.