JHS Svendgaard Gains After Settling Dispute With P&G
The settlement clears contingent liabilities of Rs 206 crore from its balance sheet.
Shares of oral care products supplier JHS Svendagaard Laboratories Ltd. rose after the company announced it had settled disputes with consumer goods major Procter and Gamble Inc. in India.
The out-of-court settlement clears contingent liabilities of Rs 206 crore from its balance sheet, according to its statement on exchanges. “All the liabilities on our side are now cleared,” Nikhil Nanda, managing director of JHS Svendagaard, told BloombergQuint over the phone.
The company’s shares gained as much as 16 percent after the announcement compared to a 0.9 percent gain in the benchmark S&P BSE Sensex Index.
The company had in 2013 filed suits worth Rs 629 crore, while P&G had filed counter-claims worth Rs 206 crore, according to JHS Svendgaard’s balance sheet as of March 2016. The company had filed the cases alleging unfair termination of a production contract by P&G. JHS Svendgaard said it had suffered huge losses as it had built manufacturing units based on product requirements.
JHS Svendgaard had also moved the Competition Commission of India (CCI) alleging that P&G used its dominant position to restrict the third-party vendor from taking orders from any of its rivals. The CCI, however, cleared P&G.
“Our business with them (P&G) stopped almost four years back when we went into litigation,” said Nanda.
“JHS management expects that the new expansion plan underway shall be operational by June 2017, and shall positively add to growth of the company in coming years,” the filing said.