Dr Reddy's in SEC list for terrorist state links

Dr Reddy's Laboratories is the lone Indian company in a list of some of the world's biggest companies named by the Securities and Exchange Commission (SEC) as those "indirectly subsidising" terrorist states like Sudan.

Sudan is one of the five countries designated by the US state department as "sponsors of terrorism". The others are Cuba, Iran, North Korea and Syria.

The list, posted on a website link launched by the US regulator, includes ABB, HSBC, Nokia, Unilever, Cadbury, Total and Siemens among others. The SEC prepared the list of those companies that have published business interest with these countries in their 2006 annual reports.

By clicking on each country, investors can see a list of companies mentioning that country in their latest annual reports.

When contacted, Satish Reddy, MD and CEO, Dr Reddy's Laboratories, said in an e-mail: "Our formulations segment markets a limited number of products in Sudan through independent distributors. Our sales in Sudan (pertaining to 2006) are not viewed as material to our business or to our overall revenue."

"The SEC sent a letter to Dr Reddy's one-a-half years ago asking the company's business details in Sudan. We replied to the SEC in January 2006, which has been acknowledged by them," Reddy added.

Dr Reddy's global branded formulations business is operational in six regions including Africa, where it is present in South Africa, Ghana, Sudan, Kenya, Uganda, Tanzania, Rwanda and Congo.

Industry experts said some companies might have appeared in the SEC list but that did not mean that they were direct or indirect supporters of terrorism.

They added that although the SEC's attempt was to protect investors' interest and exhibit the highest level of transparency, it had no tool for judging whether a company mentioned in the list did a material level of business in these countries.

The exercise is a part of the SEC's investor protection mission so that investors will know whether his or her investments are indirectly subsidising a terrorist state.