Sebi could play a role in Ranbaxy if Daiichi allegations true - Business Standard

The Securities and Exchange Board of India (Sebi) could potentially play a role in the Ranbaxy-Daiichi saga. The stock market regulator could probe the company on the basis of possible violations of the takeover code or under laws governing fraudulent trade practices if Daiichi's claims are found to hold water; and information was withheld on investigations into Ranbaxy by American authorities, say lawyers. The Singh brothers meanwhile denied Daiichi's allegations. Daiichi has alleged concealment and misrepresentation of information regarding investigations in to the company by the U.S. DOJ (Department of Justice) and FDA (Food and Drug Administration) in a press release dated Wednesday. The Ranbaxy stock was down 8.8% to close at Rs.393.15 at the end of day's trade. Somasekhar Sundaresan, partner, J Sagar Associates said that as a matter of securities law, Sebi has jurisdiction in such matters. "Sebi's PFUTP(Prohibition of Fraudulent and Unfair trade Practices ) Regulations provide that concealment of material facts to induce dealing in securities is a fraudulent / unfair trade practice relating to securities markets," he said.   P R Ramesh, Senior Consultant, Economic Laws Practice suggested that any non-disclosures  may be viewed in the light of the provisions of the listing agreement and the obligations of the target company under the Sebi Takeover code.  "The listing agreement requires prompt disclosure of material information to the public," he said.   In other words, if the company had information that would affect the company's shareprice (such as this investigation), they are obliged to share it with the public. Such disclosures also need to be made by a company coming out with an open offer, in this case; Ranbaxy when Daiichi made an open offer for shares in the company. The open offer came after Daiichi had picked up 34.8% stake in Ranbaxy in 2008 having bought out the Singh family for Rs.10,000 crore.   Daiichi currently holds 63.5% stake in the company, according to the shareholding pattern for the quarter ended March 2013. Ranbaxy disclosed last week that it paid a penalty of 500 million dollars to the US Food and Drug Administration over violations at its Indian plans and fraudulent statements made to the regulator on the same. Daiichi Sankyo said in a subsequent press release that it believes, it was not given the full facts of the investigation. The statement said that, 'certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the U.S. DOJ (Department of Justice) and FDA (Food and Drug Administration) investigations'. "Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time," added the press release. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNF0BQQdDOkfYsZ79mGW7KnsD2Su9Q&url=http://www.business-standard.com/article/companies/sebi-could-play-a-role-in-ranbaxy-if-daiichi-allegations-true-113052300849_1.html

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