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Shares in Germany's Brenntag drop on dual-use chemicals sale to Syria

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FRANKFURT (Reuters) – Shares in German chemicals distributor Brenntag dropped on Wednesday on a report that the company sold substances to a company in Syria that could go into chemical weapons, among other uses.

Sueddeutsche Zeitung said Brenntag, the world’s largest chemicals distributor, sold chemical raw materials to a Syrian pharmaceutical company. The report was made jointly with German broadcaster Bayerischer Rundfunk and Swiss publisher Tamedia.

Brenntag, whose shares were down 5.8% at 1400 GMT, said a Swiss subsidiary supplied chemicals diethylamine and isopropanol in 2014, in line with relevant laws and regulations, to Syrian drugmaker Mediterranean Pharmaceutical Industries (MPI) to produce a pain killer.

Traders cited concern about the risk of political repercussions in the United States for the German group, which has a global workforce of more than 16,600 people.

The two substances can be used in various products, such as pharmaceuticals but could also be used to make the banned nerve agent sarin.

Swiss drugmaker Novartis said it had granted MPI contract manufacturing and local distribution rights for products such as pain relief skin gel Voltaren.

Novartis said that while it supplied the active ingredient for the product in 2014, it was MPI’s responsibility to procure other ingredients such as isopropanol or diethylamine and that the Swiss group played no role in that.

Novartis added that it was asked by the Swiss State Secretariat for Economic Affairs to hand over manufacturing documents from MPI in May last year, and voluntarily did so.

Brenntag said MPI was producing the pain killer under licence for “a well-known Swiss pharmaceutical manufacturer”, without naming the company.

“Delivery of both products was made in accordance with applicable law,” Brenntag said in its statement.

The German company said it did not circumvent European Union export restrictions and said the Swiss State Secretariat for Economic Affairs had confirmed compliance with export regulations.

Prosecutors in the western German city of Essen, where Brenntag has its headquarters, confirmed they had received a complaint about the company from three non-governmental organisations — New York’s Open Society Justice Initiative, Berlin’s Syrian Archive and Switzerland’s Trial International.

A spokeswoman for the prosecutors office said no decision had been taken on whether to launch an investigation.

The U.N. Commission of Inquiry on Syria said in March that government forces had perpetrated 32 of 37 chemical attacks it had reported during the Syrian war, including the use of chlorine and sarin. The government denies using chemical weapons.

(Reporting by Ludwig Burger in Frankfurt, Matthias Inverardi in Duesseldorf, Hellen Reid in London, John Miller in Zurich; Editing by Keith Weir and Edmund Blair)

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