Ranbaxy & Daiichi Deal : Minority Shareholders Interests Compromised
Just read Ajit Dayal’s column titled Ranbaxy-Daiichi deal: a case of perverse engineering? in today’s edition of DNA Money
Hey Ajit,couldn’t agree with you more !…but it’s not the first time in India’s Corporate History that Minority Shareholders are being treated like if I may say, Step Shareholders!
There is an even better and horrid precedent…. Years back Sulzer’s foreign parent bought out the co promoter, Goenka’s stake at Rs 2000 a share ! while market prize was only Rs 250 !….as it was a transfer between promoters,SEBI’s SASTA regulations did not require a mandatory offer to existing minority shareholders to buy out atleast 20% of the equity.
Methinks that with all the controversy and uncertainty surrounding Ranbaxy with the US case on sub standard drugs and the agreement with Pfizer to delay marketing “Lipitor”, SEBI should pass a directive that the Open Offer should be for full remaining stake held by Shareholders at Rs 737 (Price being paid by Daiichi to Ranbaxy Promoters for their full stake) and not just a 20% offer which would result in only one of three shareholder shares being accepted at Rs 737…..Ranbaxy would then possibly face delisting as shareholders would rationally tender all shares which would then have to be accepted and floating stock would stop floating !
This would be fair considering the suspicion that not everyhing is above board
Growing suspicion is that the Promoters of Ranbaxy,CEO and Managing Director,Mr Malvinder Singh and Family,despite recent claims of moving towards becoming India’s Global Pharmaceutical Multinational,did a U-turn and preferred to exit and sold out their full stake to Daiichi at Rs 737 because they were fully aware of the disastrous consequences if the decision in the US case went against Ranbaxy
Today’s Business Standard carries a front page interview with Mr Singh in which he accuses,without naming them,two pharmaceutical companies,one Indian and the other a Multinational,and a coterie of brokers for the rapid fall in the stock price,
Ranbaxy crashed by 10% on Monday and a further 15% on Tuesday to a low of Rs 405 before reviving on Wednesday to close at Rs 470….It closed today at Rs 452
The Financial Express today carries a quote from Mr Mark Pohl,a US based registered patent attorney in which Mr Pohl states that the company is effectively out of business in USA if the FDA finds that the company has submitted falsified,misleading and incomplete documents and debars it.This would mean the company cannot get approval for fresh Abbreviated New Drug Applications (ANDAs) and cannot even maintain existing ones.