MUMBAI, April 30 An Indian court has temporarily
halted generic drugmaker Sun Pharmaceutical Industries Ltd's
$3.2 billion takeover of rival Ranbaxy Laboratories Ltd
until it decides on a petition for a probe into
alleged insider trading.
Last week, two individuals filed the petition in the high
court of the southern state of Andhra Pradesh, requesting the
court ask the market regulator and the two main stock exchanges
to halt the deal and order the probe. A copy of the petition was
seen by Reuters on Wednesday.
The court then ordered an "interim status quo" on the deal
and asked all the involved companies, the regulator, and the
stock exchanges for details, according to an order dated April
25 and seen by Reuters on the court's website on Wednesday.
Ranbaxy shares jumped 24 percent and trading volume tripled
in three sessions ahead of the companies' announcement that
Sun Pharma would buy the loss-making company from Japan's
Daiichi Sankyo Ltd.
The Indian market regulator said this month it was seeking
information from Ranbaxy and Sun Pharma on the transaction and
would ask for stock exchange trading data after receiving
Sun Pharma and Ranbaxy are listed on both the National Stock
Exchange and the Bombay Stock Exchange.
Sun Pharma said in a statement the company had not received
any communication related to the court order. It also said that
it had not violated any rules.
"The matter related to purchase of shares of Ranbaxy
Laboratories Ltd does not violate Insider Trading Rules," Sun
said, adding it would take "appropriate action" on the petition
as advised by its lawyers.
Ranbaxy did not immediately respond to an email requesting
comment. A spokesman for the market regulator, the Securities
and Exchange Board of India (SEBI), said they had not received
the court order and declined to comment further.
Shares in Sun Pharma, India's biggest drugmaker by market
value, fell as much as 2.7 percent on Wednesday. The stock ended
down 1.04 percent and Ranbaxy fell 2.01 percent, while the main
Mumbai market index closed 0.3 percent lower.
(Reporting by Devidutta Tripathy and Zeba Siddiqui; additional
reporting by Himank Sharma; Writing by Sumeet Chatterjee;
Editing by Miral Fahmy)