A day after Japanese drugmaker Daiichi Sankyo said that it was pursuing legal remedies against Ranbaxy’s founders — Malvinder Mohan Singh and family — for concealing information, Singh hit back saying the Japanese drug giant was “trying desperately to shift the blame away from itself.”
“That is, of course, very convenient,” Singh told HT on Thursday.
“I do not want to go into the details of how and when we will respond to the threat of legal recourse. But I can tell you that we have a solid case,” Singh, who is the executive chairman of Fortis Healthcare, said.
Last week, Ranbaxy agreed to pay $500 million (about R2750 crore) as penalty for selling adulterated medicines in the US and lying about it to the authorities.
On Wednesday, Daiichi Sankyo said that “certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the US Department of Justice (DOJ) and Food and Drug Administration (FDA) investigations,” and the company was “currently pursuing its available legal remedies.”
The Japanese drug maker had bought Ranbaxy Laboratories for an eye-popping $4.6 billion (about R20,000 crore then) in 2008.
Daiichi had bought 34.8% controlling stake held by Ranbaxy’s founders at R737 a share. It then made an open offer for up to 20% of Ranbaxy shares that is mandatory under regualtions of the Securities and Exchange Board of India (SEBI).
In 2008, the USFDA had banned 30 generic drugs produced by Ranbaxy at its Dewas and Paonta Sahib units in India, citing gross violation of approved manufacturing norms.
“At every step of the way during the negotiation process, they were made aware of the on-going investigations. They were given full access to the documents at Ranbaxy pertaining to the investigations. We did not go over to them,” Singh said
“They were the keen buyers,” he added.
“We did not go to them to sell the company,” he further said, adding, that until Wednesday, there was no suggestion by the Japanese company that there was “any concealment or misrepresentation.”
While Singh did not elaborate on the legal steps, sources said the family was clearly upset at the turn of events sullying the family’s reputation involving India's largest drug company that was founded by Singh's grand-father Bhai Mohan Singh.
“They went into the deal after satisfying itself with its due diligence, with knowledge of US FDA investigations, and with the benefit of legal advice. The belated suggestion after five years that information was concealed is false and designed to divert attention away from Daiichi Sankyo's own failures,” Singh said.
Singh had originally agreed to continue at Ranbaxy for five years but left a year after the deal was inked.
“They wanted to bring in their own systems and run the board their way. So I stepped down,” he said.