SEBI identifies PJFCPL as promoter-related entity in Par Drugs slump sale probe

This order addresses SEBI's investigation into Par Drugs and Chemicals Limited (PDCL) regarding a proposed slump sale of its core business to a promoter-related entity, Phal-Jig Fine Chemicals Private Limited (PJFCPL). SEBI examined whether the valuation of this transaction was fair and compliant with regulations, specifically noting concerns that the valuation did not account for the business as a going concern.

Par Drugs and Chemicals Limited (PDCL), Phal-Jig Fine Chemicals Private Limited (PJFCPL), M/s. Nihir Dave and Associates, Mr. Nimesh Raval

• SEBI passed an ex-parte interim order dated September 15, 2025, against PDCL for alleged contraventions of the SEBI Act, PFUTP Regulations, and LODR Regulations.
• SEBI observed that the valuation reports for the slump sale (consideration of INR 95 crores) treated the transaction as a sale of six separate physical assets rather than a profitable going concern.
• SEBI found that the valuation excluded intangibles, employees, goodwill, and technical information, which prima facie resulted in an understatement of the true business value.
• SEBI noted that the engagement letters and valuation reports did not specify that the valuation was for a slump sale of a going concern.
• SEBI observed that PDCL claimed to have obtained a fairness opinion but failed to produce it, which SEBI prima facie considered a material misstatement in shareholder communication.
• The proposed transaction involved the transfer of the entire business undertaking, including assets, liabilities, contracts, intellectual property, and employees, to PJFCPL.

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