The BSE governing board is scheduled to meet on Wednesday to decide on the Nestle case. It may be recalled that the BSE had issued three showcause notices to the company in the first week of April, seeking clarifications from it on the delay in informing the exchange about the latest developments in the company. The exchange, in its showcause notice, sought explanation as to why the company did not divulge the resignation of its managing director Darius Ardeshir to the BSE. This information, however, was selectively leaked to a section of the market whereby it influenced the share price movement of Nestle.Nestle, according to BSEofficials, had failed to intimate the exchange about the board meeting which took the crucial decision of not only accepting the resignation of Ardeshir but also appointing a new managing director, Rajendra Singh.

Interestingly, in its reply to the third showcause notice, the company told the BSE that decision of Nestle India in accepting the resignation of Ardeshir was taken through a "circular resolution" and not through a formal board meeting. The exchange has now asked for the precise timing of the decision when Ardeshir's resignation was accepted by the board. Even though Nestle's 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.