Ranbaxy Laboratories founders termed Japanese company Daiichi Sankyo's allegations that former shareholders of the Indian company hid information regarding US regulatory probes as "false and baseless" in a statement released late on Thursday.
Daiichi Sankyo had said in a statement on its website on Wednesday that it "believes that certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the US DOJ and FDA investigations."
Here's the full statement on behalf of the founders:
Daiichi Sankyo released a press statement where, among other things, it was stated that it "believes that certain former shareholders of Ranbaxy concealed and misrepresented critical information concerning the US DOJ and FDA investigations".
The phrase is an obvious reference to the members and companies of the Singh family who were shareholders of Ranbaxy.
Daiichi Sankyo's allegations of concealment and misrepresentation are false and baseless.
Daiichi Sankyo purchased the Singh family's interests in Ranbaxy in 2008 after a long negotiation process, as is typical of deals of this magnitude, and after conducting full due diligence on the affairs of Ranbaxy. The negotiations on behalf of Daiichi Sankyo were led by Mr Takashi Shoda, Daiichi Sankyo's current Representative Director and Chairman and Dr Tsutomu Une, Executive Director, who is also the current Chairman of Ranbaxy. They and Daiichi Sankyo were legally advised.
At every step of the way during the negotiation process, Daiichi Sankyo and its representatives were made aware of the on-going US FDA and DOJ investigations. They were also given full access to the documents at Ranbaxy pertaining to US FDA and DOJ investigations.
Daiichi Sankyo went in to the deal after satisfying itself with its due diligence, with knowledge of the US DOJ and FDA investigations and with the benefit of legal advice.
At the request of Daiichi Sankyo, Malvinder also agreed to continue at Ranbaxy for a period of 5 years. Malvinder left Ranbaxy in the middle of 2009. When he left, Dr Tsutomu Une of Daiichi Sankyo sent him a personal letter of appreciation to thank him for the many valuable contributions made by him and the Singh family to Ranbaxy. In that letter, Dr Une said, among other things, as follows:
"On behalf of the board members of Ranbaxy Laboratories Limited, we greatly appreciate the many valuable contributions made by you and your family to Ranbaxy. Under the leadership of your family, Ranbaxy has grown from a small pharmaceutical company providing pharmaceutical products to the people of India in the early years of the last century to an international generics giant that today has sales of several billion dollars and customers on every continent and competes internationally with the best in the industry."
As late as April 2012, Malvinder was invited by Ranbaxy to attend a launch of Ranbaxy's new product. Dr Une met Malvinder at that launch. There was no suggestion by Dr Une or anyone else on behalf of Ranbaxy or Daiichi Sankyo at that time that there was any concealment or misrepresentation.
The belated suggestion, made years after the fact, that information was concealed from and/or misrepresented to Daichii Sankyo is false and designed to divert attention away from Daiichi Sankyo's own failures to protect itself and its shareholders in the negotiations and agreement with the Singh family shareholders of Ranbaxy.
It was recently reported that Ranbaxy had entered into a settlement agreement with the US FDA and DOJ in relation to their investigations and that under that settlement agreement, Ranbaxy agreed to pay large penalties to the US FDA and DOJ. The decision to enter into that settlement agreement was made by Ranbaxy and had nothing to do with the Singh family which was not even consulted by Daiichi Sankyo/Ranbaxy.
It is unfortunate that having made that decision, Ranbaxy's largest shareholder, Daichii Sankyo, is now trying to desperately shift the blame as regards Ranbaxy's current situation away from itself. That is, of course, very convenient.