New Delhi: Drug firm Dr Reddy’s Laboratories today said a class action lawsuit has been filed against it in the US by an investor alleging misleading statements in violation of the US federal securities laws. The lawsuit filed at the District Court for New Jersey seeks damages to compensate the class of investors for a ‘purported decline’ in the company’s share price allegedly caused by the misstatements or omissions, Dr Reddy’s Laboratories said in a filing to BSE.
The company has yet not been served with the lawsuit and cannot comment on the “specific allegations in the pending litigation other than to state that the company believes the asserted claims to be without merit”, it added.
Elaborating the development, Dr Reddy’s said: “On August 25, 2017, a law firm representing a purported investor in the company filed a purported class action lawsuit against the company, its CEO and CFO in the US District Court for the District of New Jersey alleging violation of the US federal securities laws.”
The lawsuit represents a class of investors who purchased or otherwise acquired the company’s publicly traded shares on the New York Stock Exchange between June 17, 2015 through August 10, 2017, it added.
Dr Reddy’s said the lawsuit alleged that the company made materially false and/or misleading statements or omissions in connection with its corporate quality system. The allegation is specifically in connection with a warning letter from the USFDA dated November 6, 2015 and a letter from Regierung von Oberbayern in Germany, dated August 10, 2017, it added.
The company will respond to the allegations after it has been served with the lawsuit and as and when it may be required to do so by the Court, Dr Reddy’s said. Shares of Dr Reddy’s Laboratories were trading at Rs. 2,051.10 in afternoon trade on BSE, down 1.76 per cent from previous close.