Why is Dabur India facing legal challenges in the US and Canada?

Dabur India, a major corporation, is currently facing international legal troubles. Some of its subsidiary companies are being sued in the US and Canada over allegations related to cancer.

As a consequence, Dabur's shares have experienced a decline, leading to a decrease in the overall value of the company, with a 6.5% drop in share prices this year.

What

• The companies involved in the legal disputes include Namaste Laboratories LLC, Dermoviva Skin Essentials Inc., and Dabur International Ltd.
• Consumers within the hair relaxer industry have raised concerns that these companies sold products containing chemicals linked to the development of cancer and other health complications, including ovarian and uterine cancers.
• Consequently, legal action has been initiated against Dabur's subsidiaries in the US and Canada, focusing on issues of product safety.
• Approximately 5,400 cases have been filed against several companies, including those affiliated with Dabur, and are now consolidated under a "Multi-District Litigation" in a US District Court in Illinois.

Dabur's subsidiaries have refuted the allegations and have retained legal representation to defend their position.

Currently, the cases are in the preliminary stages of the legal process, with the courts assessing the validity of the filed complaints and seeking relevant information and documentation.

The allegations, reportedly based on a study, are currently deemed "unsubstantiated and incomplete."

Dabur India is known for selling products such as Vatika Shampoo and Honitus cough syrup. While the financial implications of the legal challenges remain uncertain, the company anticipates substantial legal expenses in the defense process.

With numerous ongoing cases in their initial phases, the ultimate financial implications for Dabur remain uncertain at this time.