Sun Pharma open to evaluate some past decisions; has not received any query so far from SEBI: Dilip Shanghvi

Sun Pharmaceutical Industries has said that the company is open to evaluating some of its past decisions which include $250 million loan to employees and others, a media report said.

Following the reports of a regulatory probe, Dilip Shanghvi, founder and managing director of Sun Pharma said the company will work towards re-establishing credibility and corporate governance, The Economic Times reported.

In an investors' call, Shanghvi said the company has not received any query so far from the markets regulator Securities and Exchange Board of India (SEBI) regarding a whistleblower's complaint regarding alleged irregularities by the company.

Shares of Sun Pharmaceutical dived 7.5 percent on Monday after reports that markets regulator SEBI might reopen an insider trading case against the firm and probe alleged lapses by some of its promoters.

In August 2017, Sun Pharmaceutical, its managing director Shanghvi and nine other entities settled an insider trading probe on payment of Rs 18 lakh towards settlement charges.

A file photo of Dilip Shanghvi. Reuters

A file photo of Dilip Shanghvi. Reuters

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.

"We are following highest levels of corporate governance at Sun Pharma," Shanghvi said. According to the sources, 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.

On Thursday, stock exchanges had sought clarification from Sun Pharma following a brokerage report that allegedly raised concerns about certain practices at the company.

In response, the company said the points raised pertain to historic events, some of which are dated as far back as 10-15 years. "Certain points raised in the said note are incomplete and have been presented in a negative manner.

"The supporting information to the points raised in the note has been sourced from public domain and hence this information/ data is already available in public," Sun Pharma had said in a filing on Thursday.

In August 2017, the regulator had not disclosed details of the case.However, it had appeared to be related to the acquisition of Ranbaxy by Sun Pharma from Japanese drugmaker Daiichi, as the settlement with the regulator has also been done by former Ranbaxy CEO Arun Sawhney, Daiichi's director Kazunori Hirokawa, its ex-Chairman

Takashi Shoda and its former senior executive officer Tsutomu Une.

Shoda is said to have led Daiichi's acquisition of Ranbaxy in 2008, though the Japanese giant had to eventually sell its stake in the company to Sun Pharma in 2014.
Besides, the settlement was done by Ranbaxy's former secretary SK Patawari; Sun Pharma's directors Sudhir V Valia and Sailesh Desai; and its company secretary Sunil Ajmera.

SEBI had agreed to settle proposed adjudication proceedings in the case, pertaining to violation of the "internal code of conduct for prevention of insider trading" framed by the company, after it was approached by these 11 entities with a plea under the settlement regulations "without admitting or denying the findings of fact and conclusion of law".

With inputs from PTI

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Updated Date: Dec 04, 2018 11:57:44 IST

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