More Stories

Informist, Friday, Nov. 8, 2024

MUMBAI – A whole-time member of the Securities and Exchange Board of India Friday disposed of a show cause notice issued by the market regulator to Piramal Pharma Ltd. in the company's favour. On Nov 30, 2023, SEBI issued the show cause notice to the company alleging it breached disclosure obligations under SEBI's listing regulations. But Amarjeet Singh, the whole time member who passed the order, ruled that it was not established that the information about the events alleged to not have been disclosed met the threshold of materiality of an event under listing regulations.

As per the SEBI order, in November 2019, the National Green Tribunal imposed a penalty of INR 83.2 million on account of water pollution caused by the pharmaceutical unit of Piramal Enterprises Ltd. The penalty order was not disclosed by Piramal Enterprises. Earlier, in 2018-19 (Apr-Mar), the company had also not disclosed the shutting down of a plant situated at Digwal, Telangana, by Telangana State Pollution Control Board on account of water pollution by the pharma unit of the company.

The SEBI order said Piramal Pharma was formed in March 2020 as a subsidiary of Piramal Enterprises and got listed in October 2022. Prior to listing, by way of a composite scheme of arrangement, all domestic pharmaceutical undertakings of Piramal Enterprises were demerged and transferred to Piramal Pharma. In terms of the scheme of arrangement, all legal proceedings pertaining to the demerged pharmaceutical business capable of being instituted against Piramal Enterprises could be continued against Piramal Pharma.

SEBI's whole-time member had to decide upon a key provision in SEBI's listing regulations which said an event or information will be material if the omission of such event or information resulted in alteration or discontinuity of the event or information already available publicly. He said in Friday's order the show cause notice did not establish "as to what was the event/information already available in public which would have discontinued if the disclosures were made by PEL (Piramal Enterprises)."

Another key provision under the regulation norms prescribed materiality to an event or information if it resulted in significant market reaction if made public at a later stage. The SEBI whole-time member said no material was shown in the show cause notice to substantiate this.

Shares of Piramal Pharma ended Friday 3.7% down at INR 281.55, and shares of Piramal Enterprises ended 1.8% down at INR 1,047.65 on the National Stock Exchange.  End

Reported by Rajesh Gajra

Edited by Vidhi Verma

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.