Feature

The Eclipse of A Star

Investors worry about poor corporate governance practices at Sun Pharma and price erosion in the US generics market

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The question was raised quietly but it weighs heavy, especially on a market leader that has been under attack over the past few months. In two notes, dated January 28 and February 18, the Securities and Exchange Board of India (Sebi) asked Sun Pharma to explain a “diversion of Rs.420 billion to a pharma distribution company Aditya Medisales (AML)”, according to media reports. This was reported by a business daily on March 6. The Dilip Shanghvi-led company has dismissed the allegation as baseless, but the niggling questions on corporate governance practices at the pharma major, which started last September, seem to be compounding.