Markets regulator Securities and Exchange Board of India (SEBI) is examining the whistleblower complaint against Dilip Shanghvi-led Sun Pharmaceutical Industries.
A whistleblower had last month approached SEBI with a document alleging various irregularities by the company, its promoter Shanghvi and others.
Shangvi, who is also the managing director of the pharma firm, earlier this month denied receiving any query so far from the markets regulator regarding the whistleblower complaint.
What is the issue all about?
In August 2017, Sun Pharmaceutical, Shanghvi and nine other entities settled an insider trading probe on payment of Rs 18 lakh towards settlement charges. However, reports have stated that the regulator is likely to reopen the case as it has powers to reopen cases of a settlement related to insider trading on various grounds.
The sources had said that alleged irregularities by the company's promoters and others in raising funds through Foreign Currency Convertible Bonds (FCCBs) are also likely to be investigated by the watchdog.
In August 2017, the regulator had not disclosed the details of the insider trading case.
Investors unhappy over lack of disclosures
Major fund houses and brokerage firms have expressed disappointment over the prevailing corporate governance culture Sun Pharma despite assurances from its founder Dilip Shanghvi to alter certain business practices.
Lack of disclosures around non-related party transactions to the tune of Rs 2,200 crore has become a sore spot for investors, who are questioning the nature — and beneficiaries — of these loans.
Will work towards re-establishing credibility: Shanghvi
On 3 December, Shanghvi had said that the company is open to evaluating some of its past decisions which include $250 million loan to employees and others.
Following the reports of a regulatory probe, Dilip Shanghvi, founder and managing director of Sun Pharma said the company would work towards re-establishing credibility and corporate governance.
In an investors' call, Shanghvi had said the company did not receive any query from SEBI regarding a whistleblower's complaint regarding alleged irregularities by the company.
--With inputs from agencies
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Updated Date: Dec 13, 2018 14:43:18 IST