Hyderabad/Mumbai: Dr. Reddy Laboratories’ stock fell more than 10% on Tuesday, ending up downgrading BSE sensesex, following the company admitted it could confront civil or criminal enforcement action in the US and other countries over a whistleblower complaint. irregularities.
The stock collapsed following the company told exchanges that it had been summoned by the US Securities and Exchange Commission (SEC), the US market regulator (SEC) on July 6 to obtain documents related to some Commonwealth of Independent States (CIS) countries. Dr Reddy said, “The matter may result in governmental law enforcement action against the Company in the United States and/or foreign jurisdictions, which could result in civil and criminal penalties under the pertinent laws, the possibility of such action and the outcome being reasonably uncertain at this time. .”
An anonymous anonymous complaint included allegations that healthcare professionals in Ukraine and other countries received improper payments by or on behalf of the company in violation of US anti-corruption laws, specifically the US Foreign Corrupt Practices Act. The court order came following it disclosed the matter to the US Department of Justice, the Securities and Exchange Commission of India, and the Securities Board of India, the BSE filing said. The company is in the process of responding to the case. She added that an American law firm is conducting the investigation on the instructions of a committee from the company’s board of directors.
The Hyderabad-based major pharmaceutical company opened at Rs 5,421 on the Bombay Stock Exchange (BSE) but fell as low as Rs 4,781 prior closing 10.4% (down Rs 565) at Rs 4,844 compared to the previous close of Rs 5,409.
Although Dr. Reddy notified exchanges of the whistleblower complaint and began a detailed investigation in November 2020, the company’s admission on Tuesday the potential for coming legal trouble — along with a 1.5% drop in consolidated net gain for the first quarter ended. June 30, 2021 – The markets proved too firm to absorb
Dr. Reddy’s consolidated net gain for the first quarter of FY22 fell to Rs. 571 crore from Rs. 579 crore in the first quarter of FY21, largely due to price erosion in the key North American market. The company’s earnings declined despite a 11% increase in consolidated revenue to Rs.4,919 crore from Rs.4,418 crore in Q1 FY21. As a result, the stock collapsed 10%, making Dr. Reddy the biggest laggard among the 30 components sensitive. Dr Reddy’s extensive sale has also had its effect on many other drug stocks. As a result, the BSE Healthcare Index closed 2.9% lower with Alembic Pharma, Glenmark and Lupine all closing between 5% and 11.5% lower.
BSE data showed that out of a whole of 274 slip points in the Sensex, Dr. Reddy accounted for 62 points. Market players said that news of Dr Reddy receiving a subpoena from US legal authorities/regulators has raised investors’ concerns.