If Malvider Singh wants to refute what the world has concluded about how Ranbaxy was run, he’ll have to offer a far more vigorous defence.
As investors, and indeed as consumers, we rely on being able to somehow figuring out the quality of the information being given to us. When we have conflicting information, we need to have some basis for deciding who’s wrong and who’s right. That’s proving difficult in the case of Ranbaxy and its former promoters, led by Malvinder Singh. On the one side, there’s the US pharma regulator FDA which has imposed an unprecedented fine of $500 million (R2,770 cr) on the company as punishment for fraud over a period of time when Singh was in control. Ranbaxy and its current majority shareholder, Daiichi Sankyo has admitted to these irregularities. Daiichi has accused Singh of hiding facts when it acquired the company.
On the other side there is Singh himself, who has refuted the allegations and has offered a defence that amounts to saying that Daiichi knew everything and has been unable to manage the company. However, what Daiichi has said is actually the least of the problems. The US business magazine Fortune (and its website at money.cnn.com) has published ‘Dirty Medicine’, an extremely detailed report on what was wrong at Ranbaxy and what the FDA’s case is based on. This article has gone viral on the web and social media and what it says and implies about Ranbaxy, and the way pharma is researched and manufactured in India is pretty damning.
In his recent statement, Singh has said, “We built this company over decades with hard work and cannot let anyone soil our reputation.” If that is the case, then he needs to mount a far more vigorous and detailed attack on Fortune magazine, the FDA and Daiichi. If he is right then all these entities have fabricated and spread monstrous lies about how Ranbaxy used to function when the Singh family controlled it. If he reads what is being posted online about this story, he’ll realise that it’s not just about his and his family’s reputation but also of Indian industry and of the country itself.