IT stock jumps 5% after board approves increase in buyback price
By Aditya Raghunath
Investing.com -- Dr. Reddy’s Laboratories Ltd (NS:REDY) reported its numbers for Q1 FY22. Net profit came in at Rs 570.8 crore compared to Rs 594.6 crore in the corresponding quarter last fiscal. Revenue for Q1 FY22 came in at Rs 4,919 crore, up 11% compared to Rs 4,417.5 crores in Q1 FY21.
The stock closed at Rs 4,835.2, down 10.31% today. The reason for this drop is not the missed numbers. It is because Dr. Reddy’s has been issued a subpoena of documents for CIS (Commonwealth of Independent States) geographies, and that the company is investigating an anonymous complaint into improper payments in other countries.
In an exchange filing, Dr. Reddy’s said, ''The company has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of US anti-corruption laws, specifically the US Foreign Corrupt Practices Act. A US law firm is conducting the investigation at the instruction of a committee of the Company's Board of Directors.''
The company has said that it has disclosed the ongoing investigation to the US DoJ (Department of Justice, SEC (Securities and Exchange Commission), and SEBI (Securities Exchange Board of India).
Dr. Reddy's said it is also in the process of responding to the subpoena. ''While the matter may result in government enforcement actions against the company in the United States and/or foreign jurisdictions, which could lead to civil and criminal sanctions under relevant laws, the probability of such action and the outcome are not reasonably ascertainable at this time,'' the company added.