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Dr Reddy's faces class action suit in US court

Press Trust of India  |  Hyderabad 

Dr Reddy's Laboratories (DRL) has said a law firm representing a purported investor has filed a class action suit in a USA court against the company and its key executives for alleged violations of American federal securities laws.

In a regulatory filing, the drug maker said the case has been filed in the US District Court for the District of New Jersey.

"The lawsuit alleges the company made materially false and/or misleading statements or omissions in connection with its corporate quality system and specifically in connection with a warning letter from the US Food and Drug Administration dated November 6, 2015 and a letter from the Regierung Von Oberbayern in Germany dated August 10, 2017.

"The lawsuit seeks damages to compensate the purported class of investors for a purported decline in the company's share price allegedly caused by the alleged misstatements or omissions," DRL said in the filing.

However, the company said it has not yet been served with the lawsuit and cannot comment on the specific allegation except to state "the asserted claims to be without merit".

The Indian drugmaker recently said the German health regulator has not renewed good manufacturing practice (GMP) compliance certificate of its formulations facility 2 in Bachupally in Hyderabad.

Dr Reddy's officials recently in a press conference said they were expecting re-inspection of Duvvada ( AP) plant while the plant at Srikakulam is awaiting the regulator's response as the inspection was over.

In a class action lawsuit, one or several persons sue on behalf of a larger group of persons, if a dispute is common to all and the number of affected persons is large.

DRL stocks were trading at Rs 2047.95 apiece, down 1.91 per cent over previous close, on BSE at 1415 hrs.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, August 28 2017. 16:28 IST