Markets

Sun Pharma alleges unfair business practices against it, seeks SEBI intervention

New Delhi | Updated on January 18, 2019 Published on January 18, 2019

Sun Pharmaceutical Industries on Friday asked the markets regulator SEBI to look into the issues of certain entities and individuals allegedly adopting unfair trade practices prejudicial to the company’s shareholders.

Against the backdrop of reports that a second whistle-blower complaint has been filed against it and shares taking a beating on the exchanges, Sun Pharma has written to SEBI flagging concerns that certain entities are allegedly adopting unfair trade practices.

In a letter to SEBI Chairman Ajay Tyagi, the Mumbai-based drug maker said it has come to know from a media report that a second whistle-blower complaint has been filed against the company.

“We are concerned that certain entities/ individuals are adopting unfair trade practices prejudicial to the interest of shareholders and other stakeholders,” the company said in the letter, a copy of which has been submitted to the stock exchanges.

In a clarification to BSE, the company said it has not received the alleged “172-page whistle-blower complaint” and, therefore, it is not privy to the contents of the document being referred to in the said media article.

“Hence, we cannot comment on the points being raised in the said media article,” it said. In November 2018, a whistle-blower approached SEBI with a document alleging various irregularities by the company, its promoter and others.

Referring to the latest reports, Sun Pharma said it is evident that shareholder value has been drastically eroded within a short span of time due to “unsubstantiated complaint/ allegation” against the company and a malafide campaign launched by certain media houses.

“We request your office to examine the matter in its entirety, and the role of some media houses and other stakeholders,” the drug maker said.

According to Sun Pharma, the said whistle-blower documents and other confidential e-mails are being offered for inspection to institutional investors by one media house as per the above report, which again the company is not privy to.

“In these circumstances, there is a great asymmetry in the information circulating between analysts, investors and media, leading to intense speculation.

“The availability of information contained in the whistle-blower documents to a set of selective investors does put other investors, including retail investors, in a disadvantageous position,” the letter said.

Shares of Sun Pharma came under massive selling pressure on Friday, plummeting over 8 per cent, that wiped out Rs 8,735 crore from its market valuation, amid reports of fresh allegations by a whistle-blower against the company.

The stock crashed 8.52 per cent to end the day at Rs 390.75 on BSE. During the day, it dived 12.11 per cent to hit its multi-year low of Rs 375.40.

At the National Stock Exchange (NSE), shares of the company plunged 8.51 per cent to close at Rs 390.25 apiece.

Led by the sharp fall in the stock, the company’s market valuation declined by Rs 8,735.71 crore to Rs 93,751.44 crore on BSE. The stock was the worst hit among the blue-chips on both the BSE and NSE.

In terms of equity volume, 66.72 lakh shares of the company were traded on the BSE and 8.29 crore shares changed hands on NSE during the day. On Thursday, the stock had fallen 5.77 per cent on the BSE.

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Published on January 18, 2019
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