Sun Pharma transfers local business to new subsidiary from AML
- Post By : Khushboo Sharma
- Source: ET Bureau
- Date: 10 April, 2019
On Monday 8th April 2019, India’s largest drug maker Sun Pharma has closed their transactions with the Altas Global Trading and it has transferred their domestic distribution business to a wholly owned subsidiary from Aditya Medisales (AML). The Sun Pharma Distributors (SPDL), will be incorporated from April 2019, and the distribution of the Sun’s formulation products in India will start on the same terms as it had with AML. As Sun has said that this transaction is expected to be completed by the first quarter of FY.
They also informed that the exchanges that Altus (the company with which it had a supply contract) has completed assignment of their business right and obligation includes those arising from the supply contract with the Sun Pharma to its whole owned subsidiary. This step has no material impact over the profit or loss for FY 19.
On Monday, Sun Pharma share’s were closed a Rs. 462, it was down by 0.13 per cent.
The AML is maintained by the promoters of the Sun Pharma and was in the thick of controversy couple of months ago due to a whistle blower complaint with the securities and the Exchange Board of India alleged that the transactions of dubious nature worth nearly Rs 5800 crore were conducted between the AML and Suraksha Reality. Sun refuted this allegation but the stock was battered. ALM became a related party entity only in FY18, It was Sun Pharma’s distributor for quite sometimes before that. It has a revenue of Rs 8,000 crore in FY18 and Sun Pharma said in an analyst call last December that that arrangement with the AML was for the efficient tax purposes and that it was ready to review the arrangements if the investors are not happy.