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Wockhardt in crisis

Habil Khorakiwala, chairman and promoter of the Rs 2,700 crore drug major, Wockhardt, has resigned from the helm of the pharmaceuticals-to-hospitals company.

business Updated: Mar 31, 2009 22:11 IST

Habil Khorakiwala, chairman and promoter of the Rs 2,700 crore drug major, Wockhardt, has resigned from the helm of the pharmaceuticals-to-hospitals company. While the reason for the decision is unclear, industry sources attributed the debt position of the family-owned company for the change.

Wockhardt faces an impending corporate and financial restructuring. As of Tuesday, the company’s debt was close to Rs 3750 crore — one-and-half times its net worth.

Murtaza Khorakiwala, the elder son of Habil, has been nominated for the position of managing director. Habil Khorakiwala will continue as non-executive chairman, according to a notice by the company.

Murtaza and his brother Huzaifa have been part of the company for a while, and are being groomed for top management positions for a couple of years.

According to sources, debtors and bankers could have brought about the change at the board level.

Wockhardt has referred its out of control debt situation to the Corporate Debt Restructuring Cell through ICICI Bank. ICICI was not available for comment.

The company also failed to complete an audit of its operations in the last financial year. The audit could not be completed “On account of a potential restructuring of certain businesses of the company and its subsidiaries which it is currently evaluating,” said the company in a notice to the Bombay Stock Exchange Tuesday.