Drug maker Wockhardt on Tuesday, May 23, said it has settled with markets regulator Securities and Exchange Board of India (SEBI) a case regarding the non-disclosure of the interim outcome of USFDA inspection in 2013 to the stock exchanges.
The settlement order came after Wockhardt and its three directors proposed to settle the pending proceedings, without admitting or denying the findings of fact and conclusions of law, through a settlement order.
The company received a settlement order on May 22 from SEBI for a showcause notice issued on September 15, 2022, against the company and its directors, namely Dr Habil Khorakiwala, Dr Murtaza Khorakiwala, and Dr Huzaifa Khorakiwala.
According to the SEBI order, Wockhardt and its three directors jointly paid Rs 76.68 lakh towards settlement charges. Individually, Wockhardt paid Rs 36.70 lakh and its three directors paid Rs 13.32 lakh each towards the settlement fee to the capital markets regulator.
It was alleged that Wockhardt and its three directors violated the Securities Contracts (Regulation) Act (SCRA) and insider trading rules. Khorakiwalas are also the promoters and promoter group of Wockhardt.
In a show cause notice issued in September 2022, SEBI alleged that Wockhardt had failed to enforce the code of internal procedures and conduct insider trading and ensure compliance with the same.
It had also alleged that Habil, Murtaza, and Huzaifa, being the directors on the board of the company, failed in supervision and ensuring the required compliance with regard to the implementation of the code of conduct under insider trading norms.
Further, it alleged that Wockhardt did not disclose the information related to Form 483 issuance by US Food and Drug Administration (USFDA) regarding its Waluj facility in Maharashtra, to the stock exchanges immediately.
As per SEBI, USFDA visited the facility during March 18-22, 2013 to inspect the factory and data pertaining to the Abbreviated New Drug Application (ANDA) filed by Wockhardt with the regulator for zoledronic acid injection. The regulator then issued Form 483, which is regarded as adverse observations on the factory facility.
