Sun Pharmaceutical Industries Limited has received orders from the Ministry of Corporate Affairs (MCA) through the Regional Director, North Western Region, regarding alleged violations under Sections 129 and 188 of the Companies Act, 2013. These violations are related to non-disclosure of certain related party transactions in the Board’s Reports and financial statements for the financial years 2015-16 to 2018-19. The company was also found not to have obtained the necessary approval from the Board and shareholders for transactions involving Aditya Medisales Limited from 2014-15 to 2017-18.

As a result of these violations, a compounding fee has been levied on certain directors and officers of the company. The individuals named in the order include Mr. Dilip Shanghvi (INR 9,50,000), Mr. Sudhir Valia (INR 9,00,000), Mr. Sailesh Desai (INR 9,00,000), Mr. K. Subramanian (INR 1,50,000), Mr. Uday Baldota (INR 6,00,000), and Mr. C. Muralidharan (INR 1,50,000).

This development follows a previous investigation conducted by the Securities and Exchange Board of India (SEBI), which resulted in a Settlement in February 2021 without the admission or denial of guilt. The MCA investigation, which began in 2019, ran concurrently with the SEBI inquiry, leading to these additional compounding orders.

The related party transactions in question have since been properly disclosed in subsequent Board Reports and financial statements, with the necessary approvals obtained as per the updated regulatory requirements. According to the company’s filing, there has been no material impact on its financials, operations, or other activities due to these regulatory orders. The compounding fees are non-disruptive to the company’s financial standing.

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These actions reflect Sun Pharmaceutical's commitment to maintaining corporate compliance and addressing past lapses. The company will continue to ensure adherence to all regulatory norms, including the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and will take appropriate steps as required.

Impact on Shareholders and Investors

While the compounding fees are noteworthy, they do not have any significant financial impact on the company. Investors and shareholders can continue to track the company's progress and stay updated through its official channels. The company’s efforts to rectify its compliance processes further demonstrate its commitment to transparency and good corporate governance.

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