InvestorQ : Why has SEBI issued a warning letter to Aurobindo Pharma?
rhea Babu made post

Why has SEBI issued a warning letter to Aurobindo Pharma?

Answer
image
Riya Dwivedi answered.
2 months ago
Follow

SEBI issued a stringent warning letter to Aurobindo Pharma, the Hyderabad based pharma and API company for making partial disclosures. Apparently, Aurobindo has only disclosed very limited and restricted information to the stock exchanges about the outcome of the USFDA audit of the company’s API manufacturing facility in Hyderabad. APIs are short for active pharmaceutical ingredients which are the key inputs that go into the manufacture of pharmaceutical formulations and are also colloquially referred to as bulk drugs.

Aurobindo had restricted itself to disclosing that a warning letter had been received from USFDA without disclosing details on the reason. The specific nature of non-compliance was totally omitted in the exchange filings. This was not in line with the accepted corporate governance standards, which call for full disclosure of material inflation that could impact the price of the stock. The whole purpose, according to SEBI, of this exchange filing is to ensure adequate and timely disclosure of material information to stock exchanges.

SEBI has specifically pointed out that the company giving an opinion that the objections of USFDA were not serious was uncalled for. When a global body with regulatory powers conducts an audit, the warning has to be taken seriously. The detailed warning letter is available on the website of the USFDA, but Aurobindo neither gave adequate details of the observations nor provided a link to the USFDA website where the detailed warning letter was available. That amounted to inadequate disclosure on the part of Aurobindo.

6 Views