Sebi probing stock bounce before deal

Tags: News
In a blow for the Sun Pharma-Ranbaxy deal, the Securities and Exchange Board of India (Sebi) will ask the country's stock exchanges for trading details on Ranbaxy Laboratories and Sun Pharmaceutical shares before the companies announced a merger on Monday.

A senior Sebi official told Reuters that the regulator has received multiple complaints. "We will ask exchanges on details of buy and sell trades in both Ranbaxy and Sun shares," Reuters quoted the Sebi official as saying.

A Sebi official confirmed to Financial Chronicle that the regulator was looking into the matter.

The stock exchanges told Financial Chronicle that the exchanges are looking into trading details in the days leading to the final announcement of the deal, which saw Sun Pharmaceuticals agreeing to buy Ranbaxy for $3.2 billion. "We are looking into it," said a stock exchange official, on condition of anonymity.

Ranbaxy shares had surged 24 per cent in the three trading sessions leading up to the announcement on Monday.

Amit Tandon of Institutional Investor Advisory Services (IiAS), a proxy advisory firm, said since there was a runup in prices accompanied by big volume, Sebi should conduct a probe. “We are not saying there is an insider-trading. What we are saying is probe the matter so that doubts are cleared,” Tandon said.

Following various reports on possible violation of insider-trading rules, Sun Pharmaceuticals issued a statement stating, “Our code of conduct serves as a compass that guides the actions of our employees and directors ensuring consistent and uncompromising integrity as we build trusted relationships around the world.”

On purchase of shares of Ranbaxy Labs by Silverstreet Developers LLP, Sun Pharma said it does not violate insider-trading rules. It said Sudhir Valia is not and was not a partner of Silverstreet when purchase of shares of Ranbaxy Labs was affected by it. Further, Silverstreet has two partners, both 100 per cent subsidiaries of Sun. “Hence, all the benefits flowing from the investment in Ranbaxy shall accrue to Sun Pharma,” the statement said.

Valia, executive director of Sun Pharma through his limited liability partnership, had been buying stake in Ranbaxy months before the deal, in December quarter.

Naresh Tejwani, president of the Association of National Exchanges Members of India (ANMI), told FC that if he received complaints on insider trading in Ranbaxy and Sun Pharmaceuticals by members he would take it up with Sebi.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Time and tide are ripe for megaplans such as Sagarmala

    To say that India’s infrastructure is in urgent need of upgrade would be to state the obvious.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

China looks to India for balance

Almost a third of the total world population lives in ...

Zehra Naqvi

Love and its stories

People must have bread. They can live without stories. No, Hameeda, ...

Dharmendra Khandal

Tiger in urban landscape

Ranthambhore is in a no-win situation. Just a few days ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture