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SEBI issues a settlement order for Wockhardt Ltd. and its directors. 

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In a case pertaining to alleged non-disclosure of adverse observations made by the USFDA about the company’s manufacturing facility to the exchanges in 2013, SEBI has issued a settlement order.

According to SEBI, Wockhardt ought to have disclosed the information related to Form 483 issuance by US FDA to one of its factories, to the stock exchanges immediately and having failed to do so have violated Listing Agreement and Code of internal procedures and conduct of insider trading under the erstwhile Insider Trading Regulations.

After the receipt of the Show Cause Notice, Wockhardt vehemently denied the broad brush allegations and subsequently applied for settlement under the SEBI (Settlement Proceedings) Regulations, 2018 without it admitting or denying the findings of fact and conclusions of law.

SEBI, now has issued the Settlement order in 2023.

Under the Settlement Regulations, although there is no bar on the competent authority to specify the reply of the Noticees, the authorities choose to only write the allegations without the response to them. In law, a settlement will not and cannot be considered adverse or negative against a Noticee as settlement leaves the determination of question of law as well as of facts, open. Further, settlement is usually obtained to buy peace and to put quietus to a matter, subject to payment of a usually high sum called Settlement Amount. More often than not, market participants choose to settle rather than the rigmarole of enforcement and appellate process.

[Disclosure: Regstreet Law Advisors represented Wockhardt Ltd. and its directors at SEBI.]

Copy of the Settlement order is annexed hereinbelow.

Any comments may be shared with Regstreet Law Advisors on info@regstreetlaw.com

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