Gillette India moves a step forward to meet MPS norms
The Securities & Exchange Board of India (Sebi) has finally approved Gillette India's proposal to partly reclassify its Indian promoters as non-promoter as part of its efforts to comply with the government's minimum public shareholding (MPS) rules.
Gillette India, the company behind the widely-popular shaving products, has confirmed that that the capital market regulator accepted its revised proposal to reclassify its shareholder Saroj Kumar Poddar as non-promoter.
Under the new, accepted proposal, Saroj Kumar Poddar's 4.99 per cent stake in the group will be reclassified as public holding. The Podder Heritage group will then sell the remaining 7.87 per cent of its 12.86 per cent stakeholding to the public via an offer-for-sale (OFS).
Procter & Gamble (P&G) will also cut its stake in the company to the required 75 per cent through OFS.
However, the move has been criticized by corporate governance experts who believe that the regulator's approval for Gillette India's proposal is basically against the true spirit of MPS norms.
Shriram Subramanian, founder and managing director of InGovern Research, said, "Sebi rulings should adhere to the basic principle of norms laid out by it. This ruling can help other companies which are also trying to avoid complying with the MPS, to find a way out."
As part of the new deal, Gillette India's Chairman S K Poddar and his son Akshay Poddar will step down from the company's board.
Following the announcement of Sebi approval, Gillette India stock gained 10.3 per cent to Rs 2,250 a share on BSE.