Cipla comes under Sebi investigation

Mumbai: Cipla has become the fifth pharmaceutical scrip to come under the Securities and Exchange Board of Indias (Sebi) investigation. The others are Ranbaxy, American Remedies, Jagsonpal Pharma and Lupin Laboratories.

Cipla is currently under Sebi glare following a directive by the joint parliamentary committee, which suspected a foul play when its price went up from Rs 650 in September 2000 to Rs 1,106 in January 2001. The increase in price in the Cipla scrip followed its inclusion in the Bombay Stock Exchanges all-important benchmark, the Sensex, replacing Novartis, another pharmaceutical scrip. Cipla came to be included in the Sensex from 8 January 2001, but the announcement was made in September 2000.

The reasons for investigation into other pharmaceutical scrips are different. Lupins investigation relates to promoters having sold large quantities of shares to investment companies associated with Ketan Parekh, namely Classic Credit and Panther Fincap and Management Services. Lupins promoters have also been alleged of having sold a lot of shares to a specific group of FIIs.

It is feared that Ketan Parekh and his group companies, joining hands with Lupins promoters, created artificial high prices by entering into circular trading, thus luring investors into buying scrips at higher levels. Ranbaxy promoters are also accused of having sold a large quantity of shares to Ketan Parekh and his companies in what is being looked as synchronised deals to lure outside investors to buy into the shares at higher prices.

Ranbaxy promoters are also accused of using money to pre-buy into the Ranbaxy stock, on prior information of the company entering into a deal with Bayer in relation to its new drug-delivery system. It is said that Ranbaxys promoters obtained a loan from GE capital to fund their purchases. Similar investigations have also been launched into other pharmaceutical shares mentioned above.