Dr Reddy’s Laboratories (DRL) has said that a law firm representing a purported investor has filed a class action suit against the company and its key executives in a US court for alleged violations of American federal securities laws.
In a regulatory filing, the company said that the case has been filed in the US district court for the district of New Jersey. The lawsuit represents a class of investors who purchased or otherwise acquired the company’s publicly traded shares on the New York Stock Exchange between June 15, 2015, and August 10, 2017, DRL said in a stock exchange filing.
“The lawsuit alleges the company made materially false and/or misleading statements or omissions in connection with its corporate quality system and specifically in connection with a warning letter from the US Food and Drug Administration dated November 6, 2015, and a letter from the Regierung von Oberbayern in Germany dated August 10, 2017. The lawsuit seeks damages to compensate the purported class of investors for a purported decline in the company’s share price allegedly caused by the alleged misstatements or omissions,” DRL said in the filing.
But the company has yet not been served with the lawsuit and cannot comment on the “specific allegations in the pending litigation other than to state that the company believes the asserted claims to be without merit”, it added.
Elaborating the development, Dr Reddy’s said: “On August 25, 2017, a law firm representing a purported investor in the company filed a purported class action lawsuit against the company, its CEO and CFO in the US District Court for the District of New Jersey alleging violation of the US federal securities laws.”
The news of the lawsuit, sent the company’s scrip crashing to an intra-day low of Rs 2,029.70 on the Bombay Stock Exchange. The stock closed 2% down at Rs 2,045.95 a share as against the previous close of Rs 2,087.90 a share.
