Dabur Shares Drop As Firm’s Subsidiaries Face Litigation Over Cancer Causing Product In US

Dabur Limited informed stock exchanges on Wednesday about the pending litigations against three of the company’s subsidiaries in the US. The company in it’s regulatory filing stated that the cases are in the early discovery phases of litigation. The firm revealed that the cases pertain to allegations that a hair-relaxer product sold and/or manufactured by these firms contained chemicals that caused ovarian cancer, and uterine cancer, among other health issues. 

The litigations pending in the US against Namaste Laboratories LLC, Dermoviva Skin Essentials Inc, and Dabur International Ltd, are in the initial stages of litigation and the firm noted that any final claim amount is neither a possibility right now nor can it be estimated. 

The firm added that about 5,400 cases currently are involved in multi-district litigation (MDL) in the US which name the three subsidiary companies as defendants along with some other industry names. The cases have been filed in both federal and state courts in the US and Canada. All three subsidiary firms have rejected any responsibility for these claims, and have hired legal counsel to defend themselves against the lawsuits. 

Dabur India said, “At this stage of the litigation, any financial implication due to settlement or verdict outcome cannot be determined. However, the defense costs for the litigation is expected to breach the materiality threshold, in the near future. At this stage of the litigation, settlement or verdict outcome cannot be determined. Since we are in the initial stage of litigation, any final claim settlement amount is neither probable nor estimable.”

Shares of the company fell over 2 per cent in Thursday trade and were trading at Rs 522.75 per share on the Bombay Stock Exchange, as of 2:47 PM. 

Earlier this week on Tuesday, the FMCG major revealed that it received a tax notice to pay Goods and Services Tax (GST) of Rs 321 crore, along with interest and penalty. The company in it’s regulatory filing said, “The Company has received intimation of tax ascertained as being payable under Section 74(5) of CGST Act, 2017, wherein GST short paid / not paid amounting to Rs. 3,20,60,53,069/- has been advised to be paid by the Company along with the amount of applicable interest and penalty under Section 74(5) of COST Act, 2017, failing which Show Cause Notice will be issued.”

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