Dabur India shares drop 3% as arms face lawsuits in Canada, US over cancer allegations

Shares of Dabur India dropped 3 per cent in Thursday's trade after three of its subsidiaries namely Namaste Laboratories, Dermoviva Skin Essentials and Dabur International faced cases in federal and state courts Canada and United States. The cases were filed over chemical used in hair relaxer products, which have allegedly caused ovarian cancer, uterine cancer and other health issues among users.

The federal cases were consolidated as multi-district litigation or MDL before the United States District Court for the Northern District of Illinois. At present, there are approximately 5,400 cases, which name Namaste, Dermoviva and DINTL as defendants along with certain other industry players.

The stock fell 2.56 per cent to hit a low of Rs 520.45 on BSE.

"Namaste, Dermoviva and DINTL deny liability and have retained counsel to defend them in these lawsuits as these allegations are based on unsubstantiated and incomplete study," Dabur India said.

The FMCG firm said the cases are in the pleadings and early discovery phases of litigation, which means the parties are challenging the adequacy of the plaintiffs’ complaints and, in some cases, exchanging requests for information and documents.

"There are various motions pending as well," it said adding that any financial implication due to settlement or verdict outcome cannot be determined. The defense costs for the litigation is expected to breach the materiality threshold, in the near future, it said.

At this stage of the litigation, Dabur India said the settlement or verdict outcome cannot be determined. Since it is in the initial stage of litigation, any final claim settlement amount is neither probable nor estimable, Dabur India said.

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