Shares of Sun Pharmaceuticals Ltd, plunged as much as 10.4 percent in early trade on Monday, its biggest decline since May 2017. The fall comes after news agency PTI reported, citing unnamed sources, that SEBI is likely to reopen an insider trading case against the company's promoters.
The report said that a whistleblower reportedly sent a 150-page letter to the Securities and Exchange Board of India (SEBI) alleging that the company's managing director and founder along with some others were involved in financial irregularities.
The allegations are unclear and nothing has been disclosed by the regulator or the company. Media reports are producing varied allegations from unnamed sources on India's largest pharmaceutical company. The PTI report suggested that the allegations are in connection with the company's insider trading case settled in August 2017.
SEBI holds the power to reopen cases involving settlements of insider trading on various grounds. The share price of Sun Pharma to fall sharply to Rs 441.15 a piece, following the news.
The company also reportedly has allegations associated with its past acquisitions. Australia-based investment banking and securities firm, Macquarie, in its note on 27 November said that there were irregularities in the way Sun Pharma issued FCCBs (foreign currency convertible bond). Reacting to the allegations on Thursday, the drugmaker informed the stock exchanges that the note "pertain to historic events, some of which are dated as far back as 10-15 years. Certain points raised in the said note are incomplete and have been presented in a negative manner."