Sun Pharma shares nosedived on Friday after a media report said a whistleblower sent a second complaint against the company to market regulator Securities and Exchange Board of India (Sebi).
The same whistleblower had accused India's largest pharma company of corporate governance irregularities last year as well. The complainant had submitted to Sebi documents they said proved governance failures by Sun Pharma and promoter Dilip Shanghvi, according to Reuters.
Shares of India's largest drug maker dropped moew than 12 percent to Rs 375.40 in early trading on BSE, a fresh six-year low. More than 31.4 million shares were traded in the morning session, which is around 2.7 times Sun's 30-day trading volume average of 11.7 million shares, the agency said.
"Sun Pharma has been facing issues on corporate governance for the past few months. There has been a new whistleblower complaint filed with Sebi. The company had met FIIs in December to explain its stand"
Sebi had confirmed that it had received a whistleblower complaint against Sun Pharma. However, MD Dilip Shanghvi had clarified to investors that the company hadn't violated any corporate governance norms.
Co-promoter Sudhir Valia accused
The fresh whistleblower complaint pertains to the investments made by Sun Pharma co-promoter Sudhir Valia. MoneyLife said in a report that Valia's Suraksha Realty had over Rs 5,800 crore of transactions with Aditya Medisales Limited (AML) in just over three years, between 2014 and 2017.
MoneyLife said the whistleblower had submitted a 172-page complaint backed up with documents. Reuters said Sun Pharma did not immediately respond to request for comments on the development.
Economic Times reported that it was the same whistleblower who had had complained to Sebi in the Ranbaxy insider trading case.
"Sun Pharma has been facing issues on corporate governance for the past few months. There has been a new whistleblower complaint filed with Sebi. The company had met FIIs in December to explain its stand," Sameer Kalra, Equity Research Analyst and Founder of Target Investing, told ET.
Sun, which has been battling governance issues, faced another setback last year when its US subsidiary recalled its Vecuronium Bromide Injection after the drug was found to contain particulate matter identified as glass.
PTI reported in November that Sebi was planning to launch an insider trading case investigation into Sun Pharma and its promoters, based on the whistleblower complaint.