You are here: Home » Companies » News
Business Standard

Sun Pharma, 7 executives settle dispute with Sebi; pay Rs 2.92 cr

Two whistle blowers had alleged that Sun Pharma and its subsidiary Sun Pharmaceutical Laboratories diverted funds through its sole distributor in India Aditya Medisales

Topics
Sun Pharma | Dilip Shanghvi

Samie Modak  |  Mumbai 

Sun Pharma
FILE PHOTO: A bird flies past the logo of Sun Pharma installed on the facade of its corporate office in Mumbai | Photo: Reuters

Sun Pharmaceutical Indust­ries — along with seven of its executives including (managing director) and Sudhir Valia (director) — has settled a pending dispute with the Securities and Exchange Board of India (Sebi) by agreeing to pay a cum­ulative penalty of Rs 2.92 crore.

has agreed to pay Rs 56 lakh, while Shanghvi will pay Rs 62.3 lakh, and Valia Rs 37.4 lakh. Other individuals have agreed to pay between Rs 18.5 lakh and Rs 37.4 lakh.

The matter pertains to violation of related party norms and allegations of fund diversion. Two whistle-blowers had alleged that and its wholly owned subsidiary Sun Pharmaceutical Labora­tories had been diverting funds through Aditya Medisales, its sole distributor in India. It was further alleged that the diversion continued for several years but had declared Aditya Medisales as a related party only in 2017-18.

ALSO READ: Ujjivan, Equitas small finance banks turn tricky bet amid mounting NPA woes

Based on the allegations, launched an investigation as well as a forensic audit.

It was observed that the pharma major had failed to comply with relevant regulations pertaining to related parties.

According to the order, Sun Pharma had failed to obtain prior approval of the audit committee for transactions with Aditya Medisales. Further, it had failed to obtain shareholders’ approval despite the transactions with Aditya Medisales qualifying as ‘mat­erial’ related-party transactions. The firm didn’t disclose these related-party transactions even in its annual reports.

In March 2020, initiated adjudicating proceedings in the matter. Later, in May, the regulator issued show cause notices to Sun Pharma and the seven individuals.

While the proceedings were on, Sun Pharma and the noticees filed an application for consent settlement — by way of which an alleged wrongdoer can settle proceedings with Sebi without admitting or denying the charges, by paying a settlement fee.

Sebi’s high-powered advisory committee accepted the settlement plea in December.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, February 11 2021. 17:45 IST
RECOMMENDED FOR YOU
.