BSE is, however, not satisfied with the reply and has decided to dash off a third showcause notice to Nestle. Exchange sources said that the future course of action would be decided after the receipt of the company's response to the latest showcause notice issued by it.

Nestle has, however, maintained that under the circumstances it has showed a high level of promptness in informing the stock exchanges about the board meeting and the decision taken therein viz, the resignation of the managing director. However, market experts say that the Nestle case calls for a debate on the definition of"promptness" that multinationals adopt when disclosing information to local stock exchanges.

Even though the Nestle managing director Daraius Ardeshir resigned on April 1, the exchanges were not informed of the decision till the next day ie, April 2, and that too only after the information was sought by the exchange on Sebi's directive. ``Our contention has always been that if the decision was taken after the market hours the company should have intimated the exchange in the evening or else during the early hours of office on April 2, which the company failed to do thus, violating clause 30 of the listing agreement,'' said BSE executive director RC Mathur.

Explaining the irresponsible nature of the company, Mathur stated that the company took more than two hours to revert to the exchange with an official version of the rumours floating in the market. ``The delay had seen a price volatility of over Rs 80, which is quite unhealthy for the market,'' he added.

Following the massive volatility in the scrip,Sebi had launched its own probe and simultaneously asked the exchanges to probe into the matter independently. NSE has however expressed helplessness in taking any action as the scrip features in the `permitted to trade' segment of the bourse and is therefore not covered under a listing agreement.