| Daiichi pursuing legal action on ex- shareholders |
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New Delhi, 22 May Daiichi Sankyo, the Japanese parent of Ranbaxy Laboratories, today said it believed certain former shareholders of the Indian company had concealed critical information. It was now pursuing legal remedies, Daiichi added. "Daiichi Sankyo believes certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the US DOJ (Department of Justice) and FDA ( Food and Drug Administration) investigations. Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time," Daiichi Sankyo said in a statement posted on its website. Early last week, pleading guilty of making fraudulent statements to US FDA about how it had tested drugs at two of its Indian plants, Ranbaxy agreed to pay $ 500- million penalty. During its inspection of Ranbaxy's manufacturing facilities in India, between 2006 and 2008, US FDA had found violations, incomplete testing records and an inadequate stability programme, besides manufacturing practices that did not follow regulations. Ranbaxy, then a promoter- run company with a majority stake owned by Malvinder Mohan Singh and family, was later acquired by Japan's Daiichi Sankyo in June 2008. The regulator had imposed an import alert on three of Ranbaxy's key facilities in India — at Paonta Sahib, Dewas and Batamandi — in September 2008, immediately after Daiichi signed the initial agreement with the then promoters of the company. However, amid much speculation that the deal might not see the light of day, Daiichi concluded the deal in November 2008. Singh, who continued as the CEO & MD of the company even after the acquisition, finally stepped down in May 2009. The latest statement from the Japanese drug major suggests the previous promoters and other shareholders of Ranbaxy might have to face legal action in future. An email query and phone calls to Singh remained unanswered at the time of going to press. In a separate statement, Ranbaxy CEO & Managing Director Arun Sawhney said: " Ranbaxy is a different company today. The steps we have taken over the recent years reflect the wide- ranging efforts of the current board and management to address certain conduct of the past and ensure Ranbaxy moves forward with integrity and professionalism in everything it does. We are fully committed to upholding the high standards that patients, prescribers and all other stakeholders expect." He added the company had invested $ 300 million in manufacturing facilities in recent years. According to experts, there are various legal options available to Daiichi. The company's ex- promoters can be challenged in various courts, if they had concealed facts at the time of selling stake. " It depends on the contract, what are the loopholes and gaps. Details of criminal cases pending against the company should have been disclosed by the then promoters to the Japanese company," arenowned pharma counsel said. Says former Ranbaxy owners concealed critical information on probe by US agencies RANBAXY LABS Shareholding pattern >As of March 2008 ( in %) >As of March 2013 ( in %) 34.82* Promoter 3.03 MFs / UTI 18.53 Retail Investors 17.95 FIIs 3.13 Others 2.66 GDR 19.88 Insurance firms 1.95 MFs / UTI 10.55 FIIs 10.13 Retail Investors 3.94 Others 2.09 GDR 7.82 Insurance firms 63.52 Promoter *Sold to Daiichi Sankyo Source: Capitaline Ranbaxy may cut global sales team Ranbaxy is considering downsizing its global sales force by around a third. A majority of the job cuts would be in the US, it is learnt. According to a company official, Ranbaxy' s current global field force stands at around 14, 600, of which 5, 000- 5, 200 are in India. |
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Company Secretary, Chennai
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