Shares in Dr Reddy's Laboratories crashed 5 per cent and fell as much as 7.5 percent in intra day trade as reports surfaced that Lundin Law PC has announced that it is investigating claims against Dr Reddy's Laboratories concerning possible violations of federal securities laws.

The investigation is related to allegations that certain statements issued by Dr. Reddy's were false and misleading concerning the Company's financial performance.

Apart from this the company has also been grappling with warning letters from the US FDA. Dr Reddy's recently said that it had received a warning letter for its plant in Srikakulam, Andhra pradesh and Miryalaguda in Telangana. The oncology formulation facility in Vishakapatanam also received a similar warning.

Dr Reddy's said that the warning was received for three of its plants in South India. These facilities were inspected in the months of Nov, 2014, Dec 2014 and Jan 2015. The company in a release said that it would actively engage with the agency to resolve the issues. "We have embarked on an initiative to revamp our quality system and processes", the company had said.

GoodReturns.in