Indian Court Temporarily Stalls Sun Pharma’s Ranbaxy Deal
![](https://www.indiavision.com/wp-content/themes/biggestnews/front-page/images/transparent.gif)
An Indian court temporarily stalled Sun Pharmaceutical Industries Ltd. (SUNP)’s $3.2 billion purchase of Ranbaxy Laboratories Ltd. (RBXY) as it considers a petition alleging insider trading.
Admitting a writ petition filed by a group of investors seeking a probe by the Securities and Exchange Board of India into any insider trading in Ranbaxy shares, the Andhra Pradesh High Court ordered an “interim status quo” according to a copy of the order obtained by Bloomberg News.
Ranbaxy shares surged 24 percent in the three trading days before the deal was announced and the stock’s daily average volume in that period jumped, data compiled by Bloomberg show. The high court order doesn’t appear to be a major problem, said Deven Choksey, managing director of Mumbai-based K.R. Choksey Shares & Securities Pvt.
“The regulator and the exchanges have robust surveillance systems and would have found out if it was insider trading,” he said. “I think the deal is well structured and this lawsuit will not fundamentally change the quantum or the structure of the deal.”
India’s biggest broker group last month said it would ask regulators to probe the trades made before the deal was made public. Krishnan Ramalingam, a spokesman for Ranbaxy, declined to comment on the court case or the allegations of insider trading. Sun in an e-mailed statement said the deal “does not violate insider trading rules.”