Sun Pharma MD, 10 others settle insider trading case with Sebi
New Delhi: Sun Pharmaceutical, its managing director Dilip Shanghvi, chairman Israel Makov and eight others have settled a probe by markets regulator Sebi into alleged violation of insider trading norms on a payment of Rs18 lakh towards settlement charges.
While Sebi didn’t disclose details of the case, it appears to be related to acquisition of Ranbaxy by Sun Pharma from Japanese drugmaker Daiichi, as the settlement with the regulator has also been done by former Ranbaxy CEO Arun Sawhney, Daiichi’s director Kazunori Hirokawa, its ex-Chairman Takashi Shoda and its former senior executive officer Tsutomu Une.
Shoda is said to have led Daiichi’s acquisition of Ranbaxy in 2008, though the Japanese giant had to eventually sell its stake in the company to Sun Pharma in 2014. Besides, the settlement has been done by Ranbaxy’s former secretary S K Patawari; Sun Pharma’s directors Sudhir V Valia and Sailesh Desai; and its company secretary Sunil Ajmera.
Sebi agreed to settle proposed adjudication proceedings in the case, pertaining to violation of the “internal code of conduct for prevention of insider trading” framed by the company, after it was approached by these 11 entities with a plea under the settlement regulations “without admitting or denying the findings of fact and conclusion of law”.
“The proposed adjudication proceedings for the alleged violation... are settled,” Sebi said in a settlement order passed yesterday adding it would not initiate any enforcement action for the alleged defaults. These 11 entities allegedly violated internal code of conduct for prevention of insider trading framed by the company under Sebi’s PIT (Prohibition of Insider Trading) norms.
Pending adjudication proceedings, these 11 entities had approached Sebi earlier this year to settle the case on payment settlement charges. Thereafter, Sebi’s High Powered Advisory Committee recommended the case for settlement on the payment of Rs18 lakh. This was also approved by Sebi’s panel of whole-time members, following which they remitted the amount.
Accordingly, the Securities and Exchange Board of India (Sebi) has disposed of the adjudication proceedings initiated against them. It further said that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by them is found to be untrue.