Valeant share price slumps as charges against former exec revealed

 
Hayley Kirton
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The company's shares have lost almost three quarters of their value over the last 12 months (Source: Getty)

Shares in Valeant slumped in early trading, after charges were brought against one of the company's former executives over the troubled firm's relationship with specialty mail-order pharmacy Philidor.

Gary Tanner, a former executive at Valeant Pharmaceuticals, along with Andrew Davenport, ex-chief executive of the now defunct Philidor Rx Services, were today arrested. It is alleged the duo engaged in a "multi-million dollar fraud and kickback scheme".

Both Tanner and Davenport have been charged with four counts. Each man's charges carry a possible maximum prison sentence of 65 years.

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US attorney for the Southern District of New York Preet Bharara claims the two men "concocted a fraudulent scheme to illegally use Philidor as a vehicle for personal profit and self-dealing".

"Their alleged kickback scheme illegally converted Valeant shareholder money into their own personal nest eggs," Bharara added.

Tanner ceased to be an employee of the Canadian-headquartered Valeant in September last year, while Davenport was never employed by the company.

Shares in Valeant dipped around five per cent in early trading, but have since recovered and are currently trading up 0.5 per cent at $17.95.

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The share price is now more than 70 per cent lower than this time last year.

"The counts issued today include allegations that the charged parties engaged in actions to defraud Valeant as a company," a statement for the pharma company read. "Valeant continues to cooperate with all relevant authorities in this matter."

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