'Not in any way connected with operations': Aurobindo Pharma on arrest of its promoter Sarath Reddy by ED 

Pharmaceutical firm Aurobindo Pharma on Thursday clarified that the arrest of its promoter and Whole Time Director Sarath Chandra Reddy was not in any way connected with the operations of the company or its subsidiaries. 

"Further to the disclosure of even date, Company further learnt that the arrest of Mr. P. Sarath Chandra Reddy, Whole Time Director / Promoter Group of the Company is not in any way connected with the operations of Aurobindo Pharma Limited or its subsidiaries," the pharma company said in exchange filing. 

The statement comes just hours after Reddy was arrested by the Enforcement Directorate (ED) in connection with Delhi's liquor policy scam.

Earlier today, the central probe agency arrested Reddy and Pernod Ricard General Manager Benoy Babu under sections of the Prevention of Money Laundering Act (PMLA). 

Also Read | Delhi liquor case: ED arrests Aurobindo director Sharath Reddy, Pernod Ricard GM Benoy Babu

A Business Administration graduate, Reddy is a second-generation entrepreneur and belongs to the promoter group. As per the company website, he has gained experience in general management and expertise in project executions.

Following the arrest of Reddy, shares of Aurobindo Pharma crashed 11.56 per cent on Thursday.  

Also Read | Delhi liquor scam: Will disclose details after internal probe, says Aurobindo Pharma after promoter's arrest

The probe agency produced Reddy and Babu before a Delhi court and sought 14-day custody. The agency said that both were involved in the conspiracy and amounts to the tune of Rs 100 crore were given indirectly by Reddy to Vijay Nair, another accused in the case. Nair has already been arrested by the CBI.

The ED also said Babu connived and conspired with other accused Vijay Nair and others and helped in cartelisation.

The ED initiated the money laundering probe based on an FIR filed by the CBI, which began the investigation following a recommendation from Delhi-LG Vinai Kumar Saxena. The LG's recommendation came after the Delhi chief secretary found irregularities in the new excise policy, which has now been scrapped.

The CBI in its FIR has named Delhi Deputy Chief Minister Manish and 14 others including Vijay Nair, former CEO of Only Much Louder. Among the people named in the case are then Excise Commissioner, then Deputy Excise Commissioner, then Assistant Excise Commissioner, 10 liquor licencees, and their associates.

The CBI in its FIR has alleged that irregularities were committed in modifications in the excise policy and undue favours were given to the licensees. The agency said that waivers were given in licence fees without approval and illegal gains on the count of these acts were diverted to concerned public servants by private parties by making false entries in their books of accounts.