Shares of Dabur Ltd fell sharply on October 19 on heavy volume after the company informed the stock exchange on October 18 of pending litigation against three US subsidiaries.
According to the BSE filing, the cases are in the preliminary discovery stage of litigation and allege that a hair-relaxer product contains chemicals that can cause ovarian cancer, uterine cancer and other health problems.
Lawsuits have been filed in both federal and state courts in the United States and Canada. Federal cases in the United States are consolidated as multi-district litigation, also called MDL.
Dabur’s subsidiaries Namaste, Dermoviva, and DINTL have denied any responsibility and have appointed legal representatives to defend themselves against these cases.
The argument is that the allegations are based on an incomplete and unsubstantiated study.
Street exchanges took note of the filing and shares fell to their lowest level in five months, although the company maintains that any financial impact from the settlement or ruling cannot yet be determined.