Taking action against promoters of Gillette India for non-ompliance to minimum public holding norms, Sebi today ordered freezing all corporate benefits arising out of their stake in the company.
Besides, Sebi also prohibited the promoters and directors of the company, which is part of global consumer goods giant P&G, from dealings in the shares of Gillette India, except for meeting the minimum 25 per cent public shareholding limit, till the time of their compliance to this requirement.
The corporate benefits which would be frozen include voting rights, issuance of bons shares, dividend payments etc. In addition to these interim orders, Sebi also warned the company, its promoters and directors of further penal actions including monetary penalties, prosecution proceedings and restriction in its trading, in the event of continued non-compliance. The company has been asked to present its case before Sebi within 21 days.
The order follows the disposal of Gillette's appeal by the Securities Appellate Tribunal (SAT) on July 3 against a previous decision by Sebi, wherein a proposed scheme of shareholding arrangement to meet the norms was rejected.
Gillette had offered to classify a senior Indian executive as a public shareholder, from a promoter entity previously to meet the norms, but Sebi rejected it.
As per minimum public holding norms, all private sector listed companies were required to achieve at least 25 per cent public shareholding by June 3, 2013. A day after this deadline passed, Sebi on June 4 passed similar orders against 105 companies, but Gillette was not part of those actions, as the company had at that time got an interim relief from SAT.
While dismissing Gillette's appeal, SAT also vacated that interim stay in its July 3 order and paved way for Sebi to take necessary actions against the company.
As per Sebi order, Gillette India's promoters and directors have also been restrained from taking up any new position as a director of any listed company till the time the company meets the minimum public holding norms.