As charges of bribery against an executive come to light, Biocon's shares fall 4%

22 Jun 2022 , 11:43 AM

On Wednesday, a corporate subsidiary’s official was accused of bribing a central government agency that licenses medications in India, causing a 4% decline in the value of Biocon’s shares.

On the BSE, the shares fell 3.66% to Rs 313.20. The equities have fallen back to within a few rupees of their 52-week low, which they had reached earlier in the week.

According to a media report, the Central Bureau of Investigation (CBI) has detained five individuals, including L Praveen Kumar, associate vice president and head of national regulatory affairs (NRA) at Biocon Biologics, and S Eswara Reddy, joint drug controller at the Central Drugs Standard Control Organization (CDSCO).

The CBI is looking into how a conduit with ties to Delhi helped facilitate bribes. The agency claimed that this conduit planned to bribe Reddy with Rs 9 lakh along with Kumar and other Biocon Biologics executives in exchange for “favourably processing three files” pertaining to the Biocon subsidiary’s diabetic medication Insulin Aspart.

Reddy attended the CDSCO’s subject expert committee (SEC) meeting on May 18 and backed Biocon Biologics’ request to forgo the phase III clinical trial for their “insulin aspart injection,” according to the FIR.

According to a statement released by Biocon, “We vehemently deny the claims of bribery against the firm and its officials related to the approval process of one of our products in India.”

The news article further claimed that Reddy changed the word “data” to “protocol” in the recommendations made in the SEC meeting minutes from May 18 to Biocon Biologics, “thereby causing unlawful gain.”