Dabur India’s three foreign subsidiaries have been sued in federal and state courts in the United States and Canada over allegations that their products have caused ovarian and uterine cancer, among other health problems.
In response its shares fell as much as 2.5 per cent on Thursday.
Parties involved
Namaste Laboratories, Dermoviva Skin Essentials and Dabur International, among others have been named as defendants in 5,400 cases, the company disclosed in an exchange filing.
“Cases have been filed in both federal and state courts in the United States and Canada. The federal cases were consolidated as a Multi-District Litigation, also referred to as MDL, before the United States District Court for the Northern District of Illinois,” the company said.
What is the case about?
The case revolves around complaints that hair relaxer products the firm manufactured contain chemicals linked to the development of cancer and other health complications, including ovarian and uterine cancers.
“Certain consumers in the hair relaxer product industry have alleged that some industry players or defendants sold and/or manufactured hair relaxer products that contain certain chemicals and that the use of these hair relaxer products has caused ovarian cancer, uterine cancer and other health issues in the users,” the FMCG major said.
What does Dabur sell?
Dabur sells these products over-the-counter under various brand names.
It is known for selling products such as Vatika Shampoo and Honitus cough syrup.
It is also popular for selling Chyawanprash supplement, Lal Dant Manjan toothpaste, Ashokarishta tonic, Real juices, Odomos, Pudin Hara, Hajmola digestives and more.
Currently, the cases are in the preliminary stages of the legal process.
What are hair relaxers and associated health risks?
Hair straighteners and relaxers are said to make hair smoother and easier to manage.
They contain endocrine-disrupting chemicals that are known to increase chances of developing health problems, class action lawsuits have alleged.
Company defense
“Namaste, Dermoviva and DINTL [Dabur International] deny liability and have retained counsel to defend them in these lawsuits as these allegations are based on unsubstantiated and incomplete study,” the company said.
“Currently, the cases are in the pleadings and early discovery phases of litigation”, which means the concerned parties are challenging the adequacy of the plaintiffs’ complaints.
Costly defense
“There are various motions pending as well. Since we are in the initial stage of litigation, any final quantum of claim amount is neither probable nor estimable,” it went on to say.
The financial implications due to settlement or verdict outcome cannot be determined. “However, the defense costs for the litigation is expected to breach the materiality threshold, in the near future,” it said.
