Sun Pharma Settles Whistleblower Complaint Case
Sun Pharmaceuticals Ltd. has agreed to pay a settlement amount of Rs 56.11 lakh to settle the whistleblower complaint matter.
Dilip Shanghvi, managing director at Sun Pharmaceutical Industries Ltd., and certain other executives have settled a case involving whistleblower complaints that alleged India’s largest drugmaker and its subsidiary of diverting funds through its sole distributor in the country.
The company has paid a settlement amount of Rs 56 lakh, while Shanghvi has paid Rs 62.35 lakh, which was approved by an internal committee of the Securities and Exchange Board of India, according to an order uploaded on the website of the market regulator. Besides, key executives, including Sudhir Valia and Sunil Ajmera, have paid such charges.
The case stems from a series of whistleblower complaints that accused sun Pharma and its wholly owned subsidiary — Sun Pharmaceutical Laboratories — of diverting funds through Aditya Medisales, its wholesale distributor and a related party under SEBI regulations.
On the basis of a forensic audit report and an investigation, the market regulator observed that Sun Pharma did not adhere to compliances prescribed under the listing regulations. In particular, it failed to:
Obtain prior approval of its audit committee for transactions with Aditya Medisales.
Shareholder approval for related-party transactions was not taken.
Disclosure of such transactions was note made in the annual reports for FY 2015-16 and 2016-17.
Dilip Shanghvi violated certain provisions of the listing agreement.
SEBI initiated further investigation in March last year and issued a notice asking it to show cause on why an action should not be taken against it.
To this, the entities proposed settlement of the matter without admitting or denying the findings or conclusions made by the market regulator. SEBI has reserved its right to restore or initiate the proceedings again if any representation made by the company is found to be false.