A whistleblower gives Sun Pharma a terrible day at the bourses

NEW DELHI: Shares of Sun Pharma crashed by falling over 12 per cent on Friday, taking their 2-day fall to 17 per cent. While there wasn't any fresh update by the drug maker on the stock exchanges’ websites, reports suggest a whistleblower has filed a second complaint against it. This, according to the report, was the same whistleblower who had complained to Sebi in the Ranbaxy insider trading case."When the market is trading at the high multiples, there is no room for error, especially on the corporate governance side. Whether it is a small cap or a large cap, it does not matter. And we have seen a few such instances over the last three four months where there have been a few large cap names which have got severely impacted. That is clearly something that one needs to be worried about," Mahesh Nandurkar, India Strategist at CLSA told ET Now.The stock fell 12.11 per cent to hit a low of Rs 375.40. Overall, the scrip has fallen 17.19 per cent over Wednesday's closing price of Rs 453.35. BSE has sought clarification from the company. The response is awaited. “Sun Pharma has been facing issues on corporate governance for the past few months. There has been a new whistleblower complaint filed with Sebi. The company had met FIIs in December to explain its stand,” said Sameer Kalra, Equity Research Analyst and Founder, Target Investing.On early Friday, there were signs that certain FIIs are liquidating their positions. "We have a buy rating, but with a low weightage in portfolio till the issue is resolved," Kalra said.Sebi last month confirmed reports that it had received a whistleblower complaint against Sun Pharma, India’s largest drug maker. Sun Pharma MD Dilip Shanghvi in an hour-long chat with investors had maintained that the company follows highest standards of corporate governance. Ravi Dharamshi, CIO, ValueQuest, said the corporate governance issues were not completely unknown to the market.“It is only that they are out in the public domain and they probably did not matter when you were a small company. But today, when you are in trillions of rupees of market cap, they matter a lot more because all the global FIIs have taken an exposure to your stock,” the analyst told ETNow on Thursday.The market is clearly divided. "A few people are very concerned on the corporate governance issue, but I think management has already clarified most of the things raised in corporate governance issue and one of them was that their sales to Aditya Medisales, there also they had clarified and my understanding is that because up to 2017 Aditya Medisales was not required to be reported as a related party," said Ranvir Singh of Systematix SharesSingh does not see a downside from here. "But because the issue is related to corporate governance fundamental goes in the back seat so we will see some pressure here. The Q3 result likely to come and anything positive will give the trigger. We are not very negative on Sun Pharma. After this correction, people would look at it and wait patiently," he said. 67566441 67551691 67320160

from Economic Times http://bit.ly/2CtyS5I