Sun Pharma, along with its Managing Director Dilip Shanghvi, and nine others had settled the insider trading probe, paying Rs 18 lakh against the settlement charges in 2017
Share price of pharma major Sun Pharmaceutical Industries plunged 10 percent in the early trade on December 3 after news reports of SEBI likely to reopen the investigation into the insider trading case against the company and its promoters.
A PTI report, quoting sources, said SEBI plans to reopen the investigation into the insider trading case against the company and its promoters that was settled through the consent mechanism.
Macquarie in its note raised several questions about corporate governance practices by the company. The note points to alleged connections with tainted entities like Ketan Parekh and Dharmesh Doshi, and the conflict of interest with regards to Sudhir Valia, a whole-time director of Sun Pharma and also the brother-in-law of promoter Dilip Shanghvi.
The note talks about real estate guarantees given to Suraksha Realty, apart from seeking clarification as to why a little known London-based firm Jermyn Capital was selected to manage Sun Pharma's $275 million foreign convertible bond issue back in 2004-07.
Jermyn's Indian arm allegedly has links with Parekh and Doshi, two traders who have come under scrutiny for the market crash of 2002.
Responding to the note, Sun Pharma said the information quoted in the note is available in public domain and is 10-15 years old. The management said it complies with corporate governance laws of the country.
Moneylife on November 30 reported that a whistle-blower had complained to market regulator SEBI alleging numerous irregularities against Sun Pharma, its main promoter Dilip Shanghvi and Sudhir Valia. Most of them were repetition of the points mentioned in the Macquarie note.
In addition, the whistle-blower alleged that during the Ranbaxy acquisition, the promoters may have gained as much as Rs 8,000 crore through insider trading.
Sun Pharma, along with its Managing Director Dilip Shanghvi, and nine others had settled the insider trading probe, paying Rs 18 lakh against the settlement charges in 2017.
Research house UBS has maintained buy call on Sun Pharma with a target of Rs 690 per share.
According to UBS, the whistle-blower allegations are valuation dampener at the minimum. This negatively impacts management's bandwidth at a time when key brands are getting launched.
It expects the stock to react negatively to the whistle-blower allegations.
The company will conduct a call at 06.30 pm IST on December 3 where senior management will update Investors.
Company has received final approval from USFDA for its Abbreviated New Drug Application (ANDA) for generic version of Ganirelix Acetate Injection, 250 mcg/0.5 mL.
At 0927 hours Sun Pharmaceutical Industries was quoting at Rs 448.40, down Rs 43.90, or 8.92 percent on the BSE.For more market news, click here