Shares of Aurobindo Pharma fell more than 6% to a low of Rs 506.90 intraday on Thursday after reports that its director Sarath Reddy was arrested by law enforcement agencies under part of the Prevention of Money Laundering Act (PMLA).

The ED has arrested Sarath Reddy and another executive of a company linked to the alcohol trade that is laundering money in the now scrapped Delhi excise policy case, officials said on Thursday’s investigation.

According to the company, the company’s full-time director/promoter of the company P Sarath Chandra Reddy has been arrested by the Enforcement Directorate. The company said in an exchange filing that it is working on additional details and will make further disclosures as appropriate.

The stock was down 5.7% at Rs 510.60 at 10.43 am, with about 1.62 lakh shares traded so far compared to the BSE two-week average of about 43,000 shares. Meanwhile, the mad cow disease benchmark Sensex fell 0.7% to 60,608.

Meanwhile, Aurobindo Pharma has underperformed in the market over the past year. The stock has lost 14% in the past six months, while the S&P BSE Sensex has risen 11%. It has lost 26% over the past year, while the benchmark index has gained 0.36%. The stock hit a 52-week low of Rs 494.75 on September 27, 2022.

According to ED reports, New Jersey-based Aurobindo Pharma USA Inc has recalled 9,504 vials of quinapril and hydrochlorothiazide tablets, according to the latest US Food and Drug Administration (USFDA).

The report added that the affected batches of the drug for the treatment of hypertension have been manufactured in India and marketed in the US by Aurobindo Pharma USA, Inc.

In a separate statement, USFDA said AuroMedics Pharma LLC, a subsidiary of Aurobindo Pharma, has recalled 11,520 fondaparinux injections in the US market. This medication is an anticoagulant used to treat deep vein thrombosis. According to the FDA, the company is recalling the affected units because it is a “weak drug: did not meet testing specifications.”

Aurobindo Pharma is an integrated global pharmaceutical company headquartered in Hyderabad, India. The company develops, manufactures and commercializes a broad range of generic branded speciality medicines and active pharmaceutical ingredients in more than 150 countries around the world.

The company operates 24 manufacturing and packaging facilities and has approvals from leading regulatory agencies including the USFDA, UK MHRA, EDQM, Japan PMDA, World Health Organisation, Health Canada, South Africa MCC and Brazil ANVISA.

Additionally, the company’s board of directors is scheduled to meet on Saturday, November 12 to announce earnings for the September quarter.