To get around the problem of actually having to assemble all board members at one place when they may be all over the world or travelling, Nestle apparently decided to, as a first step, circulate a resolution on the resignation of the managing director. The "circular" resolution appears to have been accepted by all board members without actually convening a meeting. A meeting is expected to be held in the near future to formally ratify the acceptance of the resignation.

This information, given in response to a show-cause notice issued by the BSE, was provided in the course of a direct meeting with exchange officials.But the area of contention between the BSE and Nestle has not necessarily narrowed. The company is now taking a stand that the decision ofApril 1, where the resignation of Darius Ardeshir was accepted, was done by circular resolution and not a board meeting, and therefore, the exchange's showcause to Nestle, which was primarily based on the alleged violation of bylaw 30 of the listing agreement, stands partially weakened. But the exchange authorities have asked for the precise timing of the decision to accept Ardeshir's resignation, which was "due to personal reasons," according to the company.

"There is a showcause notice by the BSE. There is a concern over an alleged delay in informing about Mr Ardeshir's resignation. Nestle India will show that it has done all it could, in admittedly difficult circumstances, such as the board members residing in different continents and key executives travelling," the company spokesman said.

According to sources, the company's officials met the BSE's senior office bearers on April 6 after receiving the second show cause notice to explain the reasons for the difference in the definition of "prompt notice"to the exchange.

Sources also hinted that though the meeting between BSE and Nestle proved to be futile as the issue of prompt announcement was left untouched, the exchange continues its stand that the company has not yet explained the time factor as to when the resolution process was completed satisfactorily.

Nestle had in its reply to the second show cause notice to Bombay Stock Exchange (BSE) contended that being a multinational it has to first intimate the parent company, its offices worldwide and financial institutions who hold a stake in the company before it can inform the local stock exchanges. Given the geographical distance, it could take time before this is done.

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 decision of the managing director to step down.

However, market experts say that the Nestle case has called for a debate on thedefinition of "promptness" that multinationals adopt when disclosing information to local stock exchanges.

Even though the Nestle managing director had resigned on April 1, the exchanges were not informed of the decision till April 2, and that too only after this information was sought by the exchange on the directive of Sebi.