Sun Pharma share price gains after replacement of domestic formulations distributor with its own subsidiary

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Published: January 22, 2019 12:24:11 PM

Shares of India's major drug-maker which was in the eye of a corporate governance row in in recent times, recovered in trade on Tuesday morning, after the firm made the announcement of transferring domestic formulations business from Aditya Medisales to its own subsidiary.

Sun Pharma, Sebi, Ajay Tyagi, BSE, NSE, sun pharma shareholdersSun Pharma had written to Sebi flagging concerns that certain entities are allegedly adopting unfair trade practices. (Image: Reuters)

Shares of India’s major drug-maker which was in the eye of a corporate governance row in in recent times, recovered in trade on Tuesday morning, after the firm made the announcement of transferring domestic formulations business from Aditya Medisales to its own subsidiary. Sun Pharma shares gained more than 5.7% to hit the day’s high at Rs 421.15.

“Sun Pharma’s distribution related to India Domestic Formulations Business shall be transitioned from Aditya Medisales Ltd., the current distributor, to a wholly owned subsidiary of Sun Pharma. This change will be made effective by Q1FY20, post receipt of all requisite regulatory approvals,” Sun Pharma said in a stock exchange filing. Earlier, Sun Pharma shares plunged by nearly 13 per cent intra-day on Friday, after reports of whistleblower complaints to the Securities and Exchange Board of India (SEBI) resurfaced.

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Last week, Sun Pharmaceutical asked markets regulator Sebi to look into the issues of certain entities and individuals allegedly adopting unfair trade practices prejudicial to the company’s shareholders.  The company also announced unwinding of a transaction amounting to Rs 2,238 crore with Atlas Global Trading and initiated steps to induct S R B C & Co LLP, its statutory auditors, as auditors of subsidiaries.

Notably, in a major development, The company also “unequivocally” denied that it had lent or stood guarantee for Suraksha Realty, a firm promoted by Sudhir Valia, Director of Sun Pharma. “Sun Pharma hereby confirms affirmatively that neither any loans nor guarantees have been given to Suraksha Realty. Sun Pharma would like to dispel all falsehoods being spread about its financial dealings”, the company said.

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