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

Following arrest of P Sarath Chandra Reddy, one of the promoters of Aurobindo Pharma, by the Enforcement Directorate (ED) in the ongoing Delhi liquor scam, the company on Thursday said that it will disclose further details after internal investigation.

According to BSE, P Sarath Chandra Reddy is the Executive Director of Aurobindo Pharma.  “The Company learnt that Mr. P. Sarath Chandra Reddy, Whole Time Director / Promoter Group of the Company, has been arrested by the Enforcement Directorate. The Company is in the process of ascertaining further details and will do further disclosures as appropriate,” Aurobindo Pharma said in a regulatory filing.

Earlier today, the ED arrested Reddy and Pernod Ricard general manager Benoy Babu under sections of the Prevention of Money Laundering Act (PMLA) in connection with liquor trade in the money laundering investigation into the now-scrapped Delhi excise policy case. As earlier reported by Business Today, sources in the government had said that Sharath Reddy was arrested based on the evidence against him and will be produced before a court in Delhi for custody along with Babu.

According to the company website, Reddy is a graduate of Business Administration. He is a second-generation entrepreneur and belongs to the promoter group. He has gained experience in general management and expertise in project executions, the website stated.

As news of Reddy's arrest came out earlier today, shares of Aurobindo Pharma tanked over 12 per cent on Thursday. This is not the first time that Aurobindo Pharma has been embroiled in a controversy. Earlier on October 24, 2022, the US Food and Drug Administration (USFDA) in an Enforcement Report had pulled up the company's US branch and the company was forced to recall two lots of Quinapril and Hydrochlorothiazide tablets (used for the treatment of hypertension, to lower blood pressure) from the US market due to the presence of Nitrosamine related impurities found above the acceptable limits.

Nitrosamines are common in water and foods, including cured and grilled meats, dairy products and vegetables. Everyone is exposed to some level of nitrosamines. These impurities may increase the risk of cancer if people are exposed to them above acceptable levels over long periods of time, the US FDA report said.

Aurobindo Pharma features among the top two Pharmaceutical companies in India in terms of consolidated revenues. Aurobindo exports to over 150 countries across the globe with around 90 per cent of revenues derived from international operations.

As per latest financial data available for Aurobindo Pharma in the Q1 FY23, the quarter ending June 2022, the pharma company posted net sales of Rs 6176.84 crore up 8.5 per cent on a year-on-year (YoY) basis, from Rs 5691.85 crore net sales in Q1 last year. However net profit for the company plunged 32.7 per cent YoY to Rs 524.35 crore in Q1 FY23 from Rs 778.97 crore in Q1 FY22.

Also Read: Aurobindo Pharma shares tank over 7% after ED arrests company's director