MUMBAI: The Mumbai Police has decided to close an investigation into a complaint that alleged that the Macquarie Group was circulating an investment note questioning the corporate governance practices at Sun Pharmaceuticals Industries Limited (SPIL), sources said. The Economic Offence Wing (EOW) did not find substantial evidence to commence a criminal investigation and convert its preliminary enquiry (PE) into a First Information Report (FIR), sources added.

“After the note was published, there was a remarkable dip in the SPIL shares and the probe by EOW was looking into the allegations if there was any collusion between the said company and any investment firm or traders with the intention to manipulate share prices by circulating the note. The probe has not found evidence to that effect,” said one of the persons cited above.

“A closure report will be filed soon detailing the findings,” added the source.

“This is not accurate. We are not aware of a complaint filed with the Mumbai Police against Macquarie Group. We would request you to refrain from publishing unsubstantiated, unauthenticated and misleading information in this regard,” Macquarie told B in an email response.

The Macquarie note had raised questions about alleged inadequate disclosures regarding the role of promoter Dilip Shanghvi’s brother-in-law Sudhir Valia, Sun’s past links with banned traders Ketan Parekh and Dharmesh Doshi and related party transactions. ET was the first report on the Macquarie note in its edition dated Nov 29, 2018, explaining the fall in the stock that had declined a six-month low then.

The complainant Sanjay Valia is the proprietor of Valia & Associates founded by Sudhir Valia, linked to the Sun Pharma promoter family. In his complaint Sanjay Valia said “the note titled ‘The murky waters of Sun Pharma & Co’….. (was) issued to investors to unduly benefit select clients by maliciously defaming Sun-…this note was leaked at the same time as the month-end settlement cycle drew near.” This gave short sellers a big advantage and they were able to pull down the stock price of the pharma company from Rs 510 to Rs 410 eroding market capitalisation by Rs 20,000 crore in December 2018, said the complaint filed earlier this year that ET has seen.

An email sent to Sudhir Valia remained unanswered till press time.



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