Sebi receives complaints on Ranbaxy trade, seeks data

The market regulator has received multiple complaints about alleged irregularities in trading of Ranbaxy shares before the announcement of its multi-billion dollar merger deal with Sun Pharmaceutical.

Market regulator Securities and Exchange Board of India has started collating trading data in Ranbaxy and Sun Pharma stocks from exchanges and clearing corporations following “multiple complaints about alleged irregularities in trading of Ranbaxy shares” before the announcement of its $3.2 billion merger deal with Sun Pharmaceuticals.

Sebi has received complaints from various quarters including brokers, investor associations, proxy advisory firms, fund houses, foreign investors and Association of National Exchanges Members of India, a source said.

The regulator is vetting data available on its Integrated Market Surveillance System (IMSS). Sebi collects data for suspicious market activities through multiple sources, including its network systems at stock exchanges and other market infrastructure institutions through IMSS.

“Sebi has sought the trading data of the two companies involved in the deal from the exchanges in order to carry out its investigation,” the source said.

“Because there was such kind of price movement before the deal was announced, we have decided to check with the regulator,” Naresh Tejwani, president of the Association of National Exchanges Members of India (ANMI) said on Wednesday.

Exchanges were apparently informed about the Ranbaxy deal after the midnight on Sunday. Entities suspected of having prior information about the deal before the official announcement are under the scanner.

Meanwhile, Sun Pharma denied insider allegations of trading against Silverstreet Developers LLP, a wholly owned arm, related to the deal with Ranbaxy. In a statement, Sun Pharma said the matter related to purchase of shares of Ranbaxy by Silverstreet Developers LLP “does not violate insider trading rules”.

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Sun Pharma scrip soared by 6.91 per cent to close at Rs 627.80 on the BSE on Wednesday. During the day, it surged 8 per cent to touch Rs 634.80. Ranbaxy stock rose 4.90 per cent to Rs 467.

Raising suspicions of insider trading, Ranbaxy shares which were quoting at Rs 346.75 on March 27 surged by 45.6 per cent to Rs 505 (intra-day) by Monday (April 7) in heavy volumes. On Monday alone, Ranbaxy stock opened up by nearly 10 per cent at Rs 505. On April 7, the volume in Ranbaxy shot up to Rs 108 crore from just Rs 8.44 crore on March 27.