Based on a writ petition filed by some individual investors, the High Court while ordering the status quo on Friday, issued notices to SEBI, BSE, NSE, Sun Pharma, Ranbaxy, Daichii Sankyo and Silver Street Developers.
The petitioners alleged that there was heavy trading of Ranbaxy stock before the merger with Sun Pharma was announced on April 6, and requested the court to direct the SEBI to investigate the insider trading of Ranbaxy shares and take appropriate action against Sun Pharma and Silver Street.
According to legal experts, both Sun Pharma and Ranbaxy will have to obtain approvals from BSE and NSE before proceeding for further clearances from various institutions such as Competition Commission of India and respective High Courts, on the merger.
Sun Pharma had earlier denied insider trading charges against Silverstreet Developers LLP - its wholly owned arm - in the $4 billion acquisition deal of Ranbaxy Laboratories.
In a statement, Sun Pharma had said the matter related to purchase of shares of Ranbaxy Laboratories Ltd by Silverstreet Developers LLP "does not violate insider trading rules".
Explaining how it has not violated insider trading rules, Sun had further said: "Silverstreet Developers LLP has two partners. Both are 100 per cent subsidiaries of Sun Pharma. Hence, all the benefits flowing from the investment in Ranbaxy shall accrue to Sun Pharma."
As per the statement submitted to the court, more than seven million Ranbaxy shares were traded before the merger announcement was made, pushing the share price over 25 per cent.