Dr.Reddy's spooked by Lundin

Dr.Reddy’s Labs is amongst the top losers of the day currently. The stock is down almost 3% at Rs.3280, with an intra day low at Rs.3140.  Its 52-week low is at Rs.3010.

The stock is down on unconfirmed reports that the company is caught in a probe – Lundin Law PC has announced that it is investigating claims against the company concerning possible violations of federal securities law.

The investigation is based on allegations that some statements issued by Dr.Reddy’s were false and misleading, w.r.t the company’s financial performance.

The stock exchanges have asked the company for a clarification on this unconfirmed report and it is yet to reply.

On the other hand, Nomura, which is a big investor in Dr.Reddy’s does not believe that there is much truth to these allegations by Lundin. It believes in the integrity of the company and urged investors to not pay much heed to these reports. Nomura has said that Lundin Law has been filing such similar law suits against companies and thus does not feel that these allegations do not hold any water.

The company’s clarification is awaited.