Business / Corporate

Daiichi Sankyo awarded damages over cover-up at Indian ex-subsidiary

KYODO

Daiichi Sankyo Co. said Friday that an international arbitration court has ordered former shareholders of an Indian firm it acquired in 2008 to pay the drugmaker around ¥56.2 billion ($524 million) for concealing critical information.

Daiichi Sankyo sold its stake in Ranbaxy Laboratories Ltd. to India’s Sun Pharmaceutical Industries Ltd. last year after U.S. authorities banned products made at some of Ranbaxy’s Indian plants from the U.S. market based on quality control issues.

According to Daiichi Sankyo, the former shareholders, who had been executives at Ranbaxy, knew the generic drug manufacturer had been under investigation by the U.S. Justice Department and the Food and Drug Administration but failed to disclose this at the time of the acquisition in 2008.

The Japanese drugmaker began arbitration with the former shareholders in November 2012 at the International Court of Arbitration of the International Chamber of Commerce.

Daiichi Sankyo said it will announce the impact of the award on its earnings after confirming when it will be paid the amount.