Sharemasterindia.com: Nestle India, which makes the popular Maggi noodles, came under sharp selling pressure on Wednesday, with its shares falling by as much as 4.7 per cent. Analysts attributed the selloff in shares to a Rs 640-crore case filed by the government against Nestle India for allegedly selling unsafe and hazardous products to consumers.
Nestle India said it has not yet received a copy of the complaint with the national consumer forum.
Nestle had to withdraw all varieties of Maggi noodles in June amid country-wide scrutiny for high content of monosodium glutamate (a taste enhancer) and lead in some samples.
India's food regulator - the Food Safety Standards Authority of India or FSSAI - later banned the snack, ruling it "unsafe and hazardous". Nestle has challenged the ban in the Bombay High Court, where a verdict is due soon.
The controversy over Maggi noodles has weighed on Nestle's financial performance; the company slipped to a second-quarter loss as sales fell 20 per cent because of the withdrawal of Maggi noodles from domestic markets. Nestle also reported one-time loss of Rs 452 crore in the quarter.
As of 10.35 a.m., Nestle shares traded 0.9 per cent lower at Rs 6,250, underperforming the broader markets, which traded with 0.5 per cent losses.
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