Aurobindo Pharma plunges over 14% after ED arrests company director

Shares of drug maker Aurobindo Pharma nosedived more than 14% to Rs 464 in Thursday’s intraday trade after Enforcement Directorate (ED) arrested its director Sarath Reddy under sections of the Prevention of Money Laundering Act (PMLA).

“The company learnt that P Sarath Chandra Reddy, whole-time director/ promoter group of the company, has been arrested by the Enforcement Directorate. The company is in the process of ascertaining further details and will do further disclosures as appropriate,” Aurobindo Pharma said in a stock exchange filing on Thursday.

At 2.29 pm, the stock traded 13.8% lower at Rs 466.70. Meanwhile, the BSE benchmark, Sensex, was down 0.82% at 60,532. In the last six months, the stock declined 21%, compared to an 11% rally in the S&P BSE Sensex. In the past year, it slipped 32%, against a 0.28% rise in the benchmark index.

Beside Sarath Reddy, Benoy Babu of Pernod Ricard was also arrested in the case linked to the liquor trade in the money laundering investigation being conducted by ED into the Delhi Excise policy case.

The two executives have been arrested under sections of the PMLA, news agency PTI reported. The Enforcement Directorate has conducted multiple raids in this case so far.

Later in the day, the pharma company said that the arrest of Reddy was not in any way connected with the company operations or its subsidiaries.