Sun Pharma settles whistleblower case

Feb. 12, 2021

Sun Pharma, India's largest drugmaker, has settled whistleblower complaints involving accusations of fund diversion with the Securities and Exchange Board of India (Sebi).

The case stems from a series of whistleblower complaints that accused Sun Pharma and its subsidiary — Sun Pharma Labs — of diverting funds through its sole distributor in the country, Aditya Medisales. Whistleblowers alleged that the transactions had been happening for years and that Sun Pharma's managing director Dilip Shanghvi was gaining financially from the company's operations through related-party transactions.

Following Sebi's forensic audit report and investigation, the board concluded that Sun had not abided by compliances prescribed under the listing regulations. It also noted that the drugmaker failed to get prior approval of its audit committee for transactions with Aditya Medisales.

Sun Pharma's senior management — including Shanghvi, as well as the company's CFO and additional execs paid a total settlement amount of Rs 2.36 crore ($325,000) but without admission or denial of guilt.

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