Wockhardt, Khorakiwalas Pay Rs76.68 Lakh To Settle Non-disclosure of US FDA Inspection
Moneylife Digital Team 23 May 2023
Pharmaceutical company Workhardt Ltd and its founder-chairman Habil Khorakiwala, managing director (MD) Murtaza Khorakiwala and executive director (ED) Huzaifa Khorakiwala agreed to pay Rs76.68 lakh to settle a case with market regulator Securities and Exchange Board of India (SEBI). The case is related to the alleged non-disclosure of adverse observations made by the US food and drug administration (FDA) about the company's manufacturing facility at Waluj near Aurangabad in 2013.
 
According to the SEBI settlement order, Wockhardt would pay Rs36.70 lakh, while the founder-chairman, MD and ED would pay Rs13.32 lakh each. 
 
In March 2013, a team from US FDA inspected Wockhardt's Waluj factory and issued form 483, regarded as an adverse observation of factory facilities. However, the company immediately did not disclose information about form 483 issued by US FDA to the stock exchanges. On 15 April 2013, the company announced the issuance of form 483 on its website through a press release.
 
SEBI then initiated adjudicating proceeding against the company and its top executives. Wockhardt and the Khorakiwalas filed an application for settlement in this case. 
 
Their authorised representative met SEBI's internal committee to discuss the terms of settlement. The internal committee recommended Rs36.70 lakh for Wockhardt and Rs13.32 lakh each for the top three executives as a full and final settlement of the alleged default. On 22 February 2023, the high-powered committee (HPC) of SEBI considered and approved the settlement. On 3 April 2023, the panel of whole- time members (WTMs) accepted the settlement proposal.
 
On 4th May, Wockhardt and the Khorakiwalas informed SEBI about remintannce of the settlement amount. 
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