Wockhardt, directors settle case with Sebi, pays Rs 76 lakh for settlement

Drug maker Wockhardt and its three directors on Monday settled with Sebi a case pertaining to alleged non-disclosure of adverse observations made by the USFDA about the company's manufacturing facility to the exchanges in 2013.

The entities together paid Rs 76.68 lakh towards settlement charges.

While Wockhardt paid Rs 36.70 lakh, its three directors -- Habil Khorakiwala, Murtaza Khorakiwala and Huzaifa Khorakiwala -- paid Rs 13.32 lakh each towards the settlement fee to the capital markets regulator, according to a Sebi order.

They had proposed to settle the pending proceedings, without admitting or denying the findings of fact and conclusions of law, through a settlement order, as per Sebi.

It was alleged that they had violated the Securities Contracts (Regulation) Act (SCRA) and insider trading rules.

Khorakiwalas' are also the promoter and promoter group of Wockhardt.

In a show cause notice issued in September 2022, Sebi alleged that Wockhardt had failed to enforce the code of internal procedures and conduct of insider trading and ensure compliance of the same.

It had also alleged that Habil, Murtaza and Huzaifa being the directors on the board of the company failed in supervision and ensuring the required compliances with regard to the implementation of code of conduct under insider trading norms.

Further, it alleged that Wockhardt did not disclose the information related to Form 483 issuance by US Food and Drug Administration (USFDA) to its Waluj facility in Maharashtra, to the stock exchanges immediately.

As per Sebi, USFDA visited the facility during March 18-22, 2013 to inspect the factory and data pertaining to Abbreviated New Drug Application filed by Wockhardt with the regulator for Zoledronic acid injection.

The regulator then issued Form 483 which is regarded as adverse observations on the factory facility.

In March this year, a former official of drug maker -- Vijay Khetan -- also settled the alleged insider trading case in the matter of Wockhardt after paying Rs 27.06 lakh towards the settlement fee.