Dabur India, the renowned consumer goods company, has made a public disclosure regarding its subsidiaries, revealing that they are currently embroiled in lawsuits in both the United States and Canada. These legal actions have been instigated by individuals who contend that the usage of specific hair relaxer products offered by these subsidiaries has resulted in severe health complications, including ovarian cancer and uterine cancer.
In the wake of these allegations, the company's shares witnessed a decline on Thursday, experiencing a drop of up to 2.5 percent during the morning trading session.
As per information presented in a regulatory filing, the three Dabur India subsidiaries that find themselves at the center of these legal challenges are Namaste Laboratories LLC, Dermoviva Skin Essentials Inc., and Dabur International Ltd.
Dabur India has clarified that the ongoing legal proceedings are still in their nascent stages, primarily involving initial pleadings and the early phases of discovery. The company has underscored that the allegations directed at its subsidiaries are grounded in what it terms an "unsubstantiated and incomplete" study.
Notably, approximately 5,400 cases lodged against several companies, including the three subsidiaries of Dabur India, have been consolidated into a multi-district litigation process before a U.S. District Court located in Illinois.
The aforementioned units have refuted any liability and have enlisted legal counsel to safeguard their interests, as specified by the company.
Dabur India stated, "At this stage of the litigation, any financial implication due to settlement or verdict outcome cannot be determined," while also adding that the costs associated with defending these lawsuits are anticipated to surpass a certain materiality threshold in the near future.
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