Ranbaxy shrs fall on USD 500mn US lawsuits settlement
Ranbaxy said its US arm is pleading guilty to criminal charges related to violation of the Food, Drugs and Cosmetics Act and the company. owned by Japan's Daiichi Sankyo, will now pay USD 500 million to settle all the civil, criminal lawsuits.
Moneycontrol Bureau
Ranbaxy shares slipped 3 percent on Tuesday morning after the pharma major said it and its affiliates have agreed to settle all alleged civil violations of the False Claims Act with the US and the company's US subsidiary is pleading guilty to criminal charges related to violation of the Food, Drugs and Cosmetics Act and other criminal statutes. Ranbaxy, owned by Japan's Daiichi Sankyo, will pay USD 500 million for both the civil and criminal settlements.At 9:17 hrs Ranbaxy shares were down 2.8 percent at Rs 427.55 on NSE. In 2008, the US FDA had banned Ranbaxy from exporting 30 drugs from its facilities in Dewas, Madhya Pradesh and Paonta Sahib, Himachal Pradesh and also stopped marketing approvals for new ones following quality control and data reporting issues.The company entered into a consent decree with the US Food and Drugs Administration in 2011, under which it committed to further strengthen procedures and policies and to ensure data integrity and to comply with Current Good Manufacturing Practice. Ranbaxy had already made a financial provision of USD 500 million in relation to costs to resolve the issues in 2011 and that will be sufficient to cover all material financial obligations under the agreement, it said on Tuesday.Analysts had said post the company's consent decree announcement in 2011 that the provision it had made towards the penalty was higher than expected."While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy's stakeholders; the conclusion of the DOJ (Department of Justice) investigation does not materially impact our financial situation or performance," Arun Sawhney, CEO and MD said.Also Read: Tata Steel hit by USD 1.6bn impairment on weak EU economyNachiket Kelkar
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