Sebi gets whistle-blower’s mail on irregularities at Sun Pharma
MUMBAI : Sun Pharmaceutical Industries Ltd founder and managing director Dilip Shanghvi and his brother-inlaw Sudhir Valia engaged in financial irregularities with Dharmesh Doshi, a key figure from the 2001 Ketan Parekh scam, a whistle-blower alleged.
The whistle-blower made the allegations in a 150-page letter sent to the Securities and Exchange Board of India (Sebi), which had banned Doshi and Parekh following the 2001 scam, India’s second biggest stock exchange scandal. Doshi is a former associate of Parekh.
A whistle-blower has also written to with a similar set of allegations. It could, however, not be ascertained whether it was the same person who wrote to Sebi.
Mint also could not independently verify the allegations and is reproducing the whistleblower’s account. Moneylife, on its part, on Saturday published excerpts of the 150-page complaint to Sebi.
According to the person who wrote to the irregularities involved two or three major rounds of foreign currency convertible bonds (FCCBS) issues by Sun Pharma during 20022007, which was managed by Jermyn Capital LLC.
Mint Mint,
According to Sebi’s order in 2001 on the Ketan Parekh scam, “There are linkages between Jermyn Capital LLC, Jermyn Capital Partners Plc (hereinafter referred to as ‘Jermyn Plc’) and Dharmesh Doshi/ketan Parekh.”
“These FCCBS were primarily subscribed by Bomin Finance Ltd, First International Group PLC, Orbit Investments PLC and Sun Global Investments Ltd, and through layered transactions, were allotted to Orange Mauritius Investments Ltd and Hypnos Fund Ltd,” the whistle-blower added.
In 2016, Mint had raised questions on whether First International Group PLC was allegedly a front for Doshi, based on another whistle-blower complaint. https://bit.ly/2reqkdl
At the time, Mint had also submitted all the documents to Sebi to investigate the allegations. The status of the probe could not be ascertained.
“Starting with huge funds created from the initial FCCB of Sun Pharma, the group (Doshi, Valia, Sanghvi and Sun Pharma) started to acquire larger stakes in different companies by FCCB conversion, or money obtained from FCCB conversions,” the whistleblower wrote.
According to the whistleblower, acquisitions by Sun Pharma Group of overseas pharmaceutical companies and many Indian brokerage firms were carried out in a ‘totally illegal way’. The group used the infrastructure of brokerage firms to identify target companies and then started manipulating stock prices in direct or indirect ways, he alleged.
Separately, the market regulator has taken cognizance of Australia-based investment banking and securities firm Macquarie’s note on Sun Pharma circulated on 27 November which alleged irregularities in the issue of FCCBS.
In response to an email sent to a Sun Pharma spokesperson, the company said: “We have not been contacted by Sebi in this regard.”