Ranbaxy denies charges, points finger at rivals


Four days after the news of US government’s legal action against India’s largest drugmaker became public, Ranbaxy CEO and MD Malvinder Singh came out in the open on Wednesday to defend the pharma firm. He said a few rival firms, which include a global pharma company and a leading Indian company and a clutch of stock brokers, were spreading wrong information to hammer Ranbaxy’s share price to ‘enter the company’. Around 9.30 in the morning, before the stock market opened, Mr Singh spoke to the electronic media and reiterated that Ranbaxy’s share purchase agreement with Daiichi Sankyo was binding and on track. He also said, “There is no exit clause in the agreement with Daiichi Sankyo.’’ Hearing this news from the CEO himself, Ranbaxy share price surged 15% (Rs 61.45) on BSE to Rs 470.70 on Wednesday from yesterday’s close of Rs 409.20. This came as a relief to Ranbaxy shareholders who had witnessed a sharp fall in the share price which plunged 23% in the last two days. On Tuesday, Deutsche Securities, the second largest financial shareholder in Ranbaxy after LIC (as of March’08), sold 1.3% stake or 51.38 lakh share at Rs 427.75 per share. Mr Singh added that Ranbaxy was “collecting data from the market” on share price manipulation for investigation concerned authorities. Though he declined to name the rival companies, a source said he could be hinting at pharma firms who earlier wanted to buy into Ranbaxy. “I understand that there are rumours in the market where a big pharmaceutical company and an MNC, a leading Indian company and certain stock brokers out there are trying to create uncertainty, bring the price down and take advantage of the situation that is currently there. Daiichi Sankyo and Ranbaxy deal is absolutely on track and there are no changes. The deal of Daiichi Sankyo and Ranbaxy stands, it is a binding deal. We are continuing to seek the required approvals and to take the deal forward. There is no change in it and there will be no change further too,“ Mr Singh told mediapersons. According to sector analysts, the company’s clarification over the two hanging issues - deal with Daiichi Sankyo and implications about the US government’s legal action - lifted the shares of the company on Wednesday. Says Angel Broking pharma analyst Sarabjit Kour Nangra, “The assurance from the top management that the deal with Daiichi Sankyo is on track and clarification that the impact of the legal move in the US is not as big as is being speculated has lifted the company’s stock.” Regarding the US government department of justice legal action Mr Singh said, “This is a motion to seek information and there is nothing beyond that. Any information they (US govt) need will be sent to them in the next few days. Our technical consultants PAREXEL will provide the US authorities the requisite information in the next 2-3 weeks. It is our understanding with them that this motion will be recalled once we submit all documents.” By Ms.Bobby Aanand, Metropolitan Jury.

 
Published in Corporate Law
Source : The Economic Times, http://economictimes.indiatimes.com/News_by_Industry/Ranbaxydenies_charges_points_rivals/articleshow/3242490.cms
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