Aurobindo Pharma, promoters settle insider trading case

Aurobindo Pharma on Thursday said the Securities and Exchange Board of India (SEBI) had passed a settlement order in an alleged insider trading case against the company and its promoters P.V. Ramprasad Reddy, P.Suneela Rani, Kambam Prasad Reddy, Veritaz Healthcare and Trident Chemphar.

“The company has been informed by SEBI today that SEBI has passed a settlement order dated May 6 in respect of the settlement applications filed by the company and its promoters. The settlement applications pertained to alleged violation of SEBI (Prohibition of Insider Trading) Regulations, 1992, and were based on an undertaking by the company and its promoters without admitting or denying the findings of fact and conclusions of law,” Aurobindo Pharma said in a regulatory filing.

The company has paid a settlement amount of ₹2.20 crore, while the promoters cumulatively paid a settlement amount of over ₹19.81 crore.

The company and the promoters also paid ₹60,000 each as legal costs. “In terms of the settlement order, pending enforcement proceedings stand settled qua the company and its promoters and no enforcement action will be initiated by SEBI in respect of the aforesaid allegations,” the Hyderabad-headquartered drugmaker said.

On September 23, SEBI had passed an adjudication order against the company and the promoters. On October 24, the AO Order was challenged before the Securities Appellate Tribunal. During the pendency of the appeal, on October 25, the company and the promoters filed a settlement application before SEBI in respect of the SAT appeal.

SEBI said it had conducted an investigation into the trading in the scrip of Aurobindo Pharma from July 22, 2008 to March 20, 2009 and found that Pfizer Inc and APL had issued press releases on March 2 and 3, 2009 respectively, regarding certain licensing and supply agreements entered into between them on July 22, November 30 and December 29, 2008. The press releases were followed by an increase in price of the scrip of Aurobindo Pharma.

The regulator, tracing the case in the settlement order, said Mr. Ramprasad Reddy, Ms. Rani, Mr. Kambam Prasad Reddy, Veritaz Healthcare and Trident Chemphar were found to have traded in Aurobindo Pharma scrip prior to the information about the licensing and supply agreements becoming public. Due to their connection with the company, they were alleged to be insiders in terms of the regulation.

The company allegedly failed both to disclose the price sensitive information regarding the licensing and supply agreements to the stock exchanges in violation of the listing norms and close the trading window of the company during the UPSI period.

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Printable version | Mar 4, 2021 4:15:17 PM |

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