US law firm accuses Dr Reddy’s of false claims
In yet another setback, Dr Reddy’s Laboratories has been accused by a US law firm of announcing misleading statements concerning its financial performance. However, the pharma major refuted the allegations even as its shares ended lower on the bourses.
Hyderabad: In yet another setback, Dr Reddy’s Laboratories has been accused by a US law firm of announcing misleading statements concerning its financial performance. However, the pharma major refuted the allegations even as its shares ended lower on the bourses.
Lundin Law PC, a Los Angeles-based law firm specialising in securities litigations, said it was investigating against Dr Reddy’s, concerning possible violation of federal securities laws. It made a general appeal to people to join a class-action suit against Dr Reddy’s.
“The investigation is related to allegations that certain statements issued by Dr Reddy’s were false and misleading concerning the company’s financial performance,” the law firm said.
It cited the November 6 statement of Dr Reddy's relating to warning letter from the US Food and Drug Administration (USFDA) over inadequate quality control procedures at three of its manufacturing plants in Telangana and Andhra Pradesh. “No class has been certified in the above action. Until a class is certified, you are not considered represented by an attorney. You may also choose to do nothing and be an absent class member,” the agency maintained.
Following this announcement, shares of Dr Reddy’s fell by 2.63 per cent to close at Rs 3,286 on Thursday. Meanwhile, Dr Reddy’s denied allegations and said that it always adhered to all disclosure requirements in India and abroad.
“Dr Reddy’s has always adhered to all disclosure requirements both of the Securities and Exchange Commission (SECs) and Indian stock exchanges; including accounting practices as per the International Financial Reporting Standards (IFRS) and the Indian accounting standards,” Dr Reddy’s said. The company has no further comment on what might be advertorial press releases by law firms and refutes all allegations, it added.