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HindustanTimes Sun,13 Jul 2014

Daiichi duel: Ranbaxy founders ready defence

HT Correspondent , Hindustan Times  New Delhi, November 14, 2013
First Published: 23:52 IST(14/11/2013) | Last Updated: 02:14 IST(15/11/2013)

Japanese pharmaceutical company Daiichi Sankyo's accusations that Ranbaxy's former owners had hid critical information from it, might not adversely impact the earlier promoters - Malvinder Mohan Singh and Shivinder Mohan Singh - because of specific clauses in sale deed during the firm's sale in 2008.

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"Limited indemnities (obligation to compensate for loss or damage) given by the Singh brothers insulate them from any material adverse impact in the ongoing arbitration case," said a person familiar with the development.http://www.hindustantimes.com/Images/popup/2013/11/15_11_pg17a.jpg

Daiichi Sankyo, which bought controlling stake in Ranbaxy in a multi-billion dollar deal in 2008, has dragged the Gurgaon-headquartered pharma major's former owners to an arbitration court in Singapore.

In May the company agreed to pay $500 million (about Rs. 2,750 crore) as penalty for selling adulterated medicine in the US and lying about it to the authorities.

Ranbaxy CEO and MD Arun Sawhney did not respond to HT's questions for this story.

Malvinder Mohan Singh, executive chairman of Fortis Healthcare and former promoter of Ranbaxy, also did not respond to HT's queries for this story

Last month, US Food and Drug Administration (USFDA), the US drug regulator, blacklisted Ranbaxy Laboratories' Mohali plant-the company's third factory to face such an import ban - effectively stopping shipments of 11 medicines, including the generic version of blood-pressure drug Diovan, made at the plant.

This has raised questions about the violation of hygiene and manufacturing norms even by Daiichi Sankyo, although in May, it had blamed the company's former Indian owners for concealing and misrepresenting information about US investigation into sale of adulterated drugs.

The Mohali plant was commissioned in 2011, three years after the Japanese drug maker bought Ranbaxy for an eye-popping $4.6 billion (about Rs. 20,000 crore then).

According to warranties the Singh-brothers had provided in the share purchase agreement signed by the two companies during the transaction, "to the knowledge of the company, there is no event or situation that has not been disclosed to the buyer (Daiichi) which could have a material adverse effect."


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