New Delhi: Sun Pharma on Tuesday replaced its domestic formulations distributor Aditya Medisales with its own subsidiary in the backdrop of a second whistleblower complaint filed against the company.
The company also announced unwinding of a transaction amounting to Rs 2,238 crore with Atlas Global Trading and initiated steps to induct S R B C & Co LLP, its statutory auditors, as auditors of subsidiaries.
Last week, Sun Pharmaceutical asked markets regulator Sebi to look into the issues of certain entities and individuals allegedly adopting unfair trade practices prejudicial to the company’s shareholders.
Amid reports that a second whistleblower complaint has been filed against it and shares taking a beating on the exchanges, Sun Pharma had written to Sebi flagging concerns that certain entities were allegedly adopting unfair trade practices.
“Sun Pharma’s distribution related to India domestic formulations business shall be transitioned from Aditya Medisales Ltd., the current distributor, to a wholly-owned subsidiary of Sun Pharma,” the company said in a BSE filing.
Sun Pharma said this change will be made effective by first quarter of 2019-20, post receipt of all requisite regulatory approvals.
Regarding unwinding of the transaction with Atlas Global Trading, Sun Pharma said, as of March 31, 2018, the company’s consolidated balance sheet, reflected a liability towards obligation of supplies to Atlas Global Trading amounting to Rs 2,238 crore.
“This liability was in respect of Atlas assuming the damages on account of Protonix patent litigation settlement entered by Sun Pharma which was disclosed in Sun Pharma’s annual report 2013-14,” the company said.
In September 2014, Sun Pharma’s Halol facility (Gujarat) was impacted by USFDA cGMP issues which were finally resolved in June 2018, after nearly four years. These cGMP non-compliances resulted in supply constraints thereby, Sun Pharma was not able to adhere to the agreed supply schedule with Atlas.
Sun Pharma, in 2017-18, had funded Atlas towards non-fulfilment of its supply obligations till the time such obligations are fulfilled as per the agreement.
“The said funding was included in loans and advances schedule of Sun Pharma’s 2017-18 consolidated balance sheet,” it added.
Sun Pharma said the parties to the supply contract have now agreed “in principle, that Atlas will assign its rights and obligations arising from this contract to a wholly-owned subsidiary of Sun Pharma”.
“This assignment will ensure that the loans and advances given to Atlas will be settled. On conclusion of this transaction, in the consolidated balance sheet, this loan and the obligation will cease to exist as it gets squared up. This transaction is expected to be concluded in 2018-19,” the company added.
Sun Pharma said it has also initiated steps to induct S R B C & Co LLP, its statutory auditors, as auditors of subsidiaries that are currently audited by Valia & Timbadia.
Regarding loans or guarantees to Suraksha Realty, Sun Pharma said, “neither any loans nor guarantees have been given to Suraksha Realty. Sun Pharma would like to dispel all falsehoods being spread about its financial dealings with Suraksha Realty. The company states unequivocally that it does not have any financial transactions with Suraksha Realty”.
Last week in a letter to Sebi Chairman Ajay Tyagi, the Mumbai-based drug maker had said it has come to know from a media report that a second whistleblower complaint has been filed against the company.
“We are concerned that certain entities/individuals are adopting unfair trade practices prejudicial to the interest of shareholders and other stakeholders,” the company had said in the letter, a copy of which has been submitted to the stock exchanges.
In November 2018, a whistleblower approached Sebi with a document alleging various irregularities by the company, its promoter and others.
Shares of Sun Pharma were trading 5.17 per cent higher at Rs 418.95 apiece on BSE.
RBI asks banks to grout ATMs to wall, floor for security by September-end
Mumbai: The Reserve Bank asked banks to ensure their ATMs are grouted to a wall, pillar, or floor by September-end, except those installed in high secured premises such as airports, to enhance security of the cash vending machines.
In 2016, the RBI had st up a Committee on Currency Movement (CCM) to review the entire gamut of security of treasure in transit.
Based on the recommendations of the panel, the central bank has now issued instructions aimed at mitigating risks in ATM operations and enhancing security.
As part of the security measures, all “ATMs shall be operated for cash replenishment only with digital One Time Combination (OTC) locks”.
Also, “All ATMs shall be grouted to a structure (wall, pillar, floor, etc.) by September 30, 2019, except for ATMs installed in highly secured premises such as airports, etc. which have adequate CCTV coverage and are guarded by state/central security personnel”.
Further, banks may also consider rolling out a comprehensive e-surveillance mechanism at the ATMs to ensure timely alerts and quick response, it said.
The new measures to be adopted by banks are in addition to the existing instructions, practices and guidance issued by the RBI and law enforcement agencies.
The RBI also warned the banks that non-adherence of timelines or non-observance of the instructions would attract regulatory action including levy of penalty.
SBI refuses to disclose communication from RBI, govt on electoral bonds
New Delhi: The State Bank of India has refused to disclose any communication it received from the government or the Reserve Bank of India on electoral bonds, terming it “personal information” and held in “fiduciary capacity”.
Responding to an RTI filed by Pune-based activist Vihar Durve who had demanded copies of all letters, correspondence, directions, notifications or e-mails received from the RBI or any government department between 2017 and 2019, the SBI said it cannot be provided by it.
The bank cited two exemption clauses under the RTI Act to deny information — Section 8(1)(e) which pertains to information held in fiduciary capacity and Section 8(1)(J) which pertains to personal information of a person which has no link to any public activity.
“Information sought by the applicant cannot be disclosed as it is in fiduciary capacity, disclosure of which is exempted under Section 8(1)(e) and 8(1)(j) of the RTI Act, 2005,” the Central Public Information Officer of the bank said in his reply.
The bank also refused to give any details of action taken by it on such communications from the RBI and the government.
The electoral bonds, for giving donations to political parties, are being sold through SBI only. The sale opens in SBI branches when the Finance Ministry issues a notification of their sale for a given period.
The scheme of electoral bonds notified by the Centre in 2018 has been challenged in the Supreme Court.
Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly of the State, shall be eligible to receive the bonds.
The bonds may be purchased by a person who is a citizen of India “or incorporated or established in India,” the government had said in a statement last year.
The bonds remain valid for 15 days and can be encashed by an eligible political party only through an account with the authorised bank within that period only.
A voluntary group working in the field of electoral reforms, Association for Democratic Reforms (ADR), has demanded a stay on the sale while the CPI(M) has challenged it before the Supreme Court in separate petitions.
ADR recently filed an application in the Supreme Court seeking a stay on the Electoral Bond Scheme, 2018 which was notified by the Centre in January last year.
Walmart’s Flipkart, Indian startup GOQii settle dispute over sharp discounting
New Delhi: Walmart unit Flipkart has settled a legal dispute with an Indian startup that alleged it suffered losses because its products were sharply discounted on the global retailer’s website.
GOQii, a seller of smartwatch-type health devices, sued Flipkart last month in a Mumbai court, alleging its devices were discounted by around 70 per cent to the retail price, much more than the two sides had agreed. The court had, as an interim measure, ordered device sales to be halted on Flipkart.
In a joint statement , the companies said the dispute had been resolved and GOQii health devices would again be available on Flipkart. They didn’t say how the settlement was reached.
Vishal Gondal, CEO of GOQii, told Reuters the company would withdraw the case against Flipkart. The e-commerce retailer’s “team worked on a resolution benefitting the brand and the customers”, Gondal said in the statement.
The legal spat was seen as a test case of the giant retailer’s operating strategy in the country.
Small traders and a right-wing group close to Prime Minister Narendra Modi’s ruling party have raised concerns about large e-commerce companies, saying they burn billions of dollars deeply discounting some products to lure customers onto their sites, in the expectation that they will also buy other goods.
GOQii said it signed an agreement last year with a Flipkart unit to sell two of its devices at a price not below 1,999 rupees (USD 28.63) and 1,499 rupees. It later found the devices were being sold for 999 rupees and 699 rupees, calling it “unauthorized” discounting.
In response, Flipkart said it reserved “the right to institute actions for defamation, both civil and criminal”, arguing it wasn’t responsible for any discounts which are determined by third-party firms which sell via its website.
The two companies struck a friendlier tone in their joint-statement on Friday as they brought the legal battle to an end.
“We have ensured constant engagement with GOQii to resolve any differences,” Flipkart said in the statement.
With a 19 per cent market share, GOQii was the second-biggest player in India’s so-called wearables market last year, data from industry tracker IDC showed. The market is dominated by China’s Xiaomi, with Samsung a small player.