Dabur Shares Slip On Reports Over Allegations Of Cancer Causing Products

Dabur India shares witnessed a decline of 1.62% in morning trade on BSE to 525.50 per share after its subsidiaries were sued in US and Canada by customers who reportedly alleged the use of the company's hair relaxer products caused ovarian cancer, uterine cancer and other health issues. The large cap FMCG company stated that there are approximately 5,400 cases against several companies including its subsidiaries Namaste Laboratories, Dermoviva Skin Essentials and Dabur International.

The reports led to a decline in the shares of the company. Dabur India shares saw a dip of 4.59% in last 2-weeks and over 7% fall in last 1-month.

Earlier this year in August, Dabur shares tanked when reports surfaced about the alleged presence of carcinogenic materials in its honey product. In August Zee News reported high concentration of carcinogenic material was allegedly discovered in the famous brand Dabur Honey.

Dabur India shares managed to give a mere 1% return in last 1-year when S&P BSE Fast Moving Consumer Goods offered a return of 13.08%.

Dabur India has a market capitalisation of Rs 93,120.42 crore. The stock's 52-week high price is Rs 610.40 and 52-week low price is Rs 504.00 apiece. Currently, Dabur India shares are trading 4.3% away from its 52-week low price.

Dabur also issued a regulatory filing on October 18, 2023 saying, "Pursuant to provisions of Regulation 30 read with sub-para 8 of Para B of Part A of Schedule Ill of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), as amended, we hereby submit the disclosure regarding litigation(s) pending in the United States of America, against Namaste Laboratories LLC ("Namaste"), Dermoviva Skin Essentials Inc. ("Dermoviva") and Dabur International Ltd. ("DINTL"), all of which are subsidiaries of Dabur India Limited."

Currently, the cases are in the pleadings and early discovery phases of litigation. There are various motions pending as well. Since we are in the initial stage of litigation, any final quantum of claim amount is neither probable nor estimable. However, the Company is disclosing the details of aforesaid pending litigations, since the cumulative value of impact on account of legal defence cost is expected to breach the materiality threshold under the Listing Regulations, added the BSE filing of Dabur.

Dabur said, cases have been filed in both federal and state courts in the United States and in Canada. The federal cases were consolidated as a Multi-District Litigation, also referred to as MDL, before the United States District Court for the Northern District of Illinois.

Certain consumers in the hair relaxer product industry have alleged that some industry players / defendants sold and/or manufactured hair relaxer products that contain certain chemicals and that the use of these hair relaxer product has caused ovarian cancer, uterine cancer and other health issues in the users. Currently there are approximately 5400 cases in the MDL which name Namaste, Dermoviva and DINTL as defendants along with certain other industry players.

Namaste, Dermoviva and DINTL deny liability and have retained counsel to defend them in these lawsuits as these allegations are based on unsubstantiated and incomplete study.

Currently, the cases are in the pleadings and early discovery phases of litigation, which means the parties are challenging the adequacy of the plaintiffs' complaints and, in some cases, exchanging requests for information and documents. There are various motions pending as well.