Sun Pharmaceuticals Ltd on Wednesday denied insider trading charges against Silverstreet Developers LLP — its wholly-owned subsidiary — in the $4 billion deal to acquire Ranbaxy Laboratories Ltd.
It may be noted that early this week, the Mumbai-based firm surpised analysts and markets announcing its decision to fully acquire Ranbaxy in an all stock transaction with a total equity value of $3.2 billion, along with debt of $800 million taking the overall deal value to $4 billion.
The combined entity of Sun Pharma and Ranbaxy creates the 5th largest specialty generics company in the world and the largest pharmaceutical company in India in terms of sales.
As on March, 2014, Silverstreet Developers LLP's holding in Ranbaxy stood at 1.64 per cent. Interestingly, prior to the September quarter of fiscal 2013-14, Silverstreet had no stake in Ranbaxy and by the end of December, 2013 it bought shares of the Gurgaon-based firm aggregating 1.41 per cent stake.
The matter related to purchase of shares of Ranbaxy Laboratories Ltd by Silverstreet Developers LLP does not violate insider trading rules, said Sun Pharma in a statement.
It has been reported that Sudhir V Valia, brother-in-law of Sun Pharma Managing Director Dilip Shanghvi, was one of the partners of Silverstreet Developers LLP.
According to the company, Sudhir Valia is not and was not a partner of Silverstreet Developers LLP when purchase of shares of Ranbaxy Laboratories Ltd was affected by LLP.
“Silverstreet Developers LLP has two partners. Both are 100 per cent subsidiaries of Sun Pharma. Hence, all the benefits flowing from the investment in Ranbaxy shall accrue to Sun Pharma,” Sun added.