Sun Pharma on Wednesday denied insider trading charges against Silverstreet Developers LLP -- its wholly owned arm -- in the $4 billion acquisition deal of Ranbaxy Laboratories.
Silverstreet Developers LLP, which had no holding in Ranbaxy at the end of September 2013, had bought shares of the Gurgaon-based firm aggregating 1.41 per cent stake by end of December 2013. As on March 31, 2014, its holding stood at 1.64 per cent.
In a statement, Sun Pharma said the matter related to purchase of shares of Ranbaxy Laboratories Ltd by Silverstreet Developers LLP ‘does not violate insider trading rules’. 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.
Sun Pharma, however denied this.
"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," the company said.
Explaining how it has not violated insider trading rules, Sun further said: "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."
The Mumbai-based firm, announced on Monday it will 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 combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.