Unichem Lab slumps after EU competition regulator slaps fine

Unichem Laboratories tumbled 5.75% to Rs 204.95 at 9:53 IST on BSE after the European Commission decided to impose a fine on Niche/Unichem (jointly and severally).

The announcement was made during market hours today, 10 July 2014.

Meanwhile, the S&P BSE Sensex was up 21.43 points or 0.08% at 25,466.24.

On BSE, so far 13,000 shares were traded in the counter as against average daily volume of 38,000 shares in the past two weeks.

The stock hit a high of Rs 215 and a low of Rs 203.25 so far during the day.

Unichem Laboratories (Unichem) said that the European Commission (the EU's top competition regulator) decided to impose a wholly unjustified fine on Niche/Unichem (jointly and severally) contending that it had acted in breach of EU Antitrust Rules. The European Commission reached this conclusion because its subsidiary, Niche Generics (Niche), agreed to settle financially crippling patent litigation with Laboratories Servier (Servier) at the beginning of 2005, Unichem said in a statement.

Unichem said it vehemently denies any wrongdoing on the part of either itself or Niche. Moreover, Unichem was not involved in the agreement to settle the litigation with Servier back in 2005 as it only took full ownership of Niche late in 2006, the company said in a statement.

Unichem cannot in any way see how it can be held accountable for what was in any event a pro-competitive act on the part of its than only part-owned subsidiary Niche, Unichem said in a statement.

Unichem said it will vigorously appeal the European Commission decision to the EU courts and seek to attain the correct result in this matter a result which is the best interests of the consumer. While Unichem presses ahead with its intention to have the European Commission's decision overturned it intends to carry on its business as usual, the company said in a statement.

Unichem Laboratories' net profit fell 1.8% to Rs 30.48 crore on 1.6% decline in net sales to Rs 237.49 crore in Q4 March 2014 over Q4 March 2013.

Unichem Laboratories is an international, integrated, specialty pharmaceutical company. It manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India and several other markets across the world.

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