Dabur India, a renowned consumer goods company, has made it known that its subsidiaries are currently entangled in legal disputes in the United States and Canada. These legal proceedings have been initiated by customers who allege that the use of specific hair relaxer products from these subsidiaries has led to severe health problems, including ovarian cancer and uterine cancer.
In response to these allegations, the company's shares encountered a decline on Thursday, with a drop of up to 2.5 per cent recorded during the morning trading session.
As per a regulatory filing, the three Dabur India subsidiaries facing these legal cases are Namaste Laboratories LLC, Dermoviva Skin Essentials Inc., and Dabur International Ltd.
Dabur India has clarified that these ongoing legal cases are currently in their preliminary stages, involving the filing of pleadings and early discovery phases. The company has also stressed that the allegations against its subsidiaries are rooted in what it has described as an "unsubstantiated and incomplete" study.
Approximately 5,400 cases against various companies, including the three subsidiaries of Dabur India, have been consolidated into a multi-district litigation proceeding before a US District Court in Illinois.
The subsidiaries have firmly denied any liability and have retained legal counsel to mount a defence, the company noted.
It was further stated, "At this juncture in the litigation process, it is impossible to ascertain any financial implications arising from settlements or verdict outcomes."
Nonetheless, the company has indicated that the costs associated with defending these legal cases are anticipated to surpass the materiality threshold in the near future.
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