Shares of Sun Pharma declined over 7 percent on Wednesday on reports that the Securities and Exchange Board of India (Sebi) has ordered a forensic audit against the company to look into allegations of financial irregularities and lapses in corporate governance standards.

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The stock fell as much as 7.6 percent to Rs 406 per share on BSE. At 11:28 am, the stock was trading 7 percent lower at Rs 407.65 compared to a 0.26 percent or 94 points fall in BSE Sensex at 36,468.

"Sebi has ordered a forensic audit to confirm the findings of its initial inquiry," a senior Sebi official told Moneycontrol. The market regulator has been poring over Sun Pharma's books of accounts to look into red flags raised by the whistle-blower in his complaint.

Earlier, a Business Standard report said that the Sebi inquiry had cleared Sun Pharma of any wrongdoing, after finding no merit in the whistleblower's allegations. But a retired Sebi official told Moneycontrol that the agency does not give clean chits based on preliminary inquiry.

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First Published:Sept 4, 2019 10:03 AM IST