The announcement of a majority stake sale of Dabur Pharma Ltd to Fresenius Kabi Pte Ltd has come after repeated, formal statements by Dabur denying even the possibility of such a deal until very recently—although The Economic Times broke the news several weeks ago. Dabur Pharma’s denial was vehement—it claimed the company was looking at acquisitions, rather than sales. Now we know otherwise—officially.
Flat denials are routinely issued by Indian companies amid active negotiations, much like Air Deccan did just ahead of its deal with Kingfisher.
Both Dabur and Deccan are publicly listed. Even if companies must keep the details of talks under wraps for strategic reasons, they are responsible to investors, as such deals clearly move markets. In many countries, when confronted with such questions by the media, firms often confirm talks or overtures to regulators, without getting into specifics. Shouldn’t Sebi penalize public companies for denials that simply amount to lying?