Sun Pharmaceutical limited (Sun Pharma) on Wednesday issued an official clarification denying insider trading charges against Silverstreet Developers llP, its wholly owned subsidiary, in the $ 4 billion acquisition deal of Ranbaxy laboratories. Silverstreet Developers llP, which held no stake in the Ranbaxy by the end of September 2013, had bought 1.41 per cent stake in Ranbaxy 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."
Insider trading issue triggered after reports blamed Sudhir V Valia, brother-in-law of Sun Pharma Managing Director Dilip Shanghvi, to be one of the partners of Silverstreet Developers llP. However, Sun Pharma denied this and in its statement said, "Sudhir Valia is not and was not a partner of Silverstreet Developers llP when purchase of shares of Ranbaxy laboratories ltd was affected by Silverstreet Developers llP."
Explaining how it has not violated insider trading rules, the statement 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, had on Monday announced 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.