U.S. court dismisses lawsuits against two Dabur subsidiaries; stock rises over 1%

FMCG (Fast moving consumer goods) major Dabur in a statement on Wednesday said that two of its subsidiaries Dabur and Dermoviva have been dismissed as defendants in the U.S. district court. Following the development, the share price of the company surged as much as 1.35% to hit an intraday high of ₹533.10 apiece on the BSE.

The dismissal was due to paucity of personal jurisdiction as neither Dabur nor Dermoviva manufactured, marketed, distributed or sold hair relaxer products in the U.S.. Namaste is its only international subsidiary left to face charges in these cases along with other industry players like L'Oreal, SoftSheen/Carson, Luster Products Inc, Avion Industries, Inc.; PDC Brands (Parfums de Coeur, Ltd), Revlon etc.

Dabur clarifies that this lawsuit does not concern any Dabur brand or product, accentuating that the company is not a party to these suits. The sale of hair relaxer products by Namaste comprises less than 1% of the total consolidated turnover of Dabur India Ltd.

"We wish to inform that Dabur and Dermoviva have been dismissed as defendants in federal cases, which were consolidated as a Multi-District Litigation, also referred to as MDL, before the United States District Court for the Northern District of Illinois, for lack of personal jurisdiction as neither Dabur nor Dermoviva manufactured, marketed, distributed or sold hair relaxer products in the US. Hence, now only Namaste remains as a defendant in these cases along with many other industry players such as L'Oreal, SoftSheen/Carson, Luster Products Inc, Avion Industries, Inc.; PDC Brands (Parfums de Coeur, Ltd), Revlon etc," Dabur states.

"Namaste is confident on the safety of its products and believes that these lawsuits have no legal merits hence denies any liability and has retained counsel to defend it in these lawsuits as these allegations are based on unsubstantiated and incomplete study published in the journal of the National Institute of Health, which study has already been held to be redundant by the Cosmetic, Toiletry & Perfumery Association in the European Union. That said, Namaste has product liability insurance cover in place for any potential damages / claims and defense cost" the company adds.