Dabur's three foreign subsidiaries face lawsuits in US, Canada

Three foreign subsidiaries of Dabur India are facing multiple lawsuits in the federal and state courts in the US and Canada over allegation that their hair-relaxer products have caused ovarian cancer, uterine cancer and other related health issues. The three Dabur India subsidiaries facing multiple lawsuits are -- Namaste Laboratories LLC, Dermoviva Skin Essentials Inc and Dabur International Ltd -- said a late-night regulatory filing from the homegrown FMCG and Ayurvedic products maker on Wednesday.

"Cases have been filed in both federal and state courts in the United States and in 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," it said.

Currently, there are approximately 5,400 cases in Multi-District Litigation, which named Namaste, Dermoviva and DINTL as defendants, along with certain other industry players, it added.

"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 company informed.

According to Dabur, its subsidiaries - Namaste, Dermoviva and DINTL "deny liability" and have retained counsel to defend them in these lawsuits as "these allegations are based on unsubstantiated and incomplete study," it added.

All these cases are in the pleadings and early discovery phases of litigation, which means the parties are challenging the adequacy of the plaintiffs' complaints and, in some cases, exchanging requests for information and documents.

"There are various motions pending as well," it added.

Over expected financial implications on the company due to compensation, penalty etc, Dabur said at this stage of the litigation, any such implication "due to settlement or verdict outcome cannot be determined".

"Since we are in the initial stage of litigation, any final claim settlement amount is neither probable nor estimable," it said.

However, the company said defence costs for the litigation are expected to breach the materiality threshold in the near future.

According to the latest report, Dabur India has 27 subsidiary companies, which contributed to 26.60% of the consolidated revenue from operations in FY 2022-23.

Its revenue from international business was at Rs 2,867 crore, recording a growth of 11.1% in constant currency terms in FY23.

Dabur India has 8 International manufacturing locations, according to its latest annual report.