Procter & Gamble consults legal eagles on Sebi's Gillette order

Procter and Gamble, the world's largest consumer products firm, has approached India's top legal eagles to explore options on the recent regulatory orders passed against one of its local arms, Gillette India , for non-compliance of public shareholding norms.The Cincinnati-based company has consulted senior Supreme Court counsel Harish Salve and Delhi-based litigation firm Karanjawala and Company to explore all legal options, including challenging the orders before the Supreme Court, said two persons familiar with the development, clarifying that the company has not formally appointed the legal experts on this matter. Capital market regulator Sebi , via an interim order dated July 5, had ordered freezing of Procter and Gamble's voting rights and corporate benefits, including dividends after the Securities Appellate Tribunal (SAT) turned down the firm's appeal against the regulator.The Securities and Exchange Board of India (Sebi) had on April 26 rejected Gillette India's plan of re-classifying promoter holdings to comply with the mandatory public shareholding requirement of 25%."The company's representatives have had a conference call with Salve and lawyers of Karanjawala and Company to discuss the various possibilities with regard to the recent Sebi and SAT orders," the two persons said. A SAT order can be challenged before the Supreme Court, but it is not clear whether the company will approach the top court."We are looking into the Sebi and SAT orders in detail and remain committed to complying with the new law and engaging with Sebi to achieve compliance with the minimum 25% public shareholding requirement norm," a Procter and Gamble spokesperson said in an emailed response to ET.AG Lafley-led Procter and Gamble holds nearly 76% in Gillette India, while its Indian partner, Kolkata-based industrialist Saroj Poddar, owns nearly 13%, taking the promoters' shareholding to about 89%. To meet India's new public shareholding norms, the promoters' combined stake should come down by 14%. With neither partner willing to reduce holding, Gillette sought to re-classify Poddar as a public shareholder. Sebi, however, rejected the proposal, prompting Gillette India to appeal against its order.