Shares of Patanjali were tanking on Wednesday after the Supreme Court banned the firm from advertising its products for allegedly misleading content.
What Happened: The Supreme Court on Tuesday issued an interim order imposing a ban on advertisements of products by Patanjali Ayurved, citing concerns over misleading claims regarding their medicinal properties.
The bench criticised Patanjali for allegedly misleading the public by promoting medicines that claim to cure certain diseases without empirical evidence.
The Court’s order prohibits Patanjali from advertising or marketing any medicinal products claiming to treat specific ailments specified under the Drugs and Magic Remedies (Objectionable Advertisements) Act until further notice. Additionally, the Court directed Patanjali not to make adverse statements against other forms of medicine.
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Furthermore, the Court issued a contempt of court notice to Patanjali’s founders, Baba Ramdev and Acharya Balkrishna, for allegedly flouting previous court orders by continuing to propagate false and misleading claims about their products. The notice requires them to respond within two weeks.
The bench was hearing a plea filed by the Indian Medical Association (IMA) alleging a smear campaign against the COVID-19 vaccination drive and modern medicine by Patanjali. Previously, the Supreme Court had threatened to impose heavy costs for false claims made in Patanjali’s advertisements, emphasising the need to address misleading medical advertisements.
During the hearing, the Court expressed dismay over Patanjali’s disregard for previous orders and criticised the AYUSH Ministry for its failure to address misleading advertisements effectively. The Court underscored the importance of protecting consumers from misleading claims and emphasised its concern for the common man’s well-being.
Patanjali said in an exchange filing that the Supreme Court order would not have any effect on the financial performance of its food arm, Patanjali Foods, which only operates in edible oil and food fast-moving consumer goods products.
Price Action: Patanjali’s share price was down 2.95% at ₹1,574.85 near the start of trade on Wednesday.
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