Sun Pharma denies insider trading charges in Ranbaxy deal

Sun Pharma on Wednesday strongly refuted the allegations of insider trading by Sudhir Valia, the executive director and brother-in-law of Dilip Shanghvi, in the run-up to the Ranbaxy deal. The 26% jump in Ranbaxy shares in the week before the deal announcement raised questions about whether some in the market had a whiff of the deal.

The Securities and Exchange Board of India (Sebi) may also seek information from both Sun Pharma and Ranbaxy Labs to ascertain the names of people who had access to the unpublished price sensitive information, sources said.

“Sebi will explore all the angles to see if any securities law has been violated,” the person said.

Last week, volumes in Ranbaxy counter were almost five times its two-week average. In the statement on Wednesday, Sun Pharma said, “Sudhir Valia is not and was not a partner of Silverstreet Developers LLP when purchase of shares of Ranbaxy Laboratories was affected by LLP. Silverstreet Developers LLP has two partners.

Both are 100% subsidiaries of Sun Pharma. Hence, all the benefits flowing from the investment in Ranbaxy shall accrue to Sun Pharma”.

In an exclusive interview to ETon Tuesday Dilip Shanghvi, managing director of Sun Pharma, had rubbished the insider trading allegations. “I think those who talk about this (insider trading) do not understand what an insider trading is. Now the decision to sell has to be taken by Diiachi Sankyo not by Sun Pharma, so how can somebody in Sun Pharma be an insider,” Shanghvi said.

“There cannot be an insider in Sun till Diiachi takes a decision. If somebody in Sun Pharma comes to know that then it is insider trading, but that’s not the case here,” he added.

In December last year, Sun Pharma had disclosed to stock exchanges that Silver Street Developers LLP had acquired 1% in Ranbaxy.