The long-standing feud between Jayaram Chigurupati, founder of Hyderabad-based biopharmaceutical player Zenotech Laboratories Ltd, and its new promoter Daiichi Sankyo seems to have come to an end, with Chigurupati stepping down as the Managing Director.
Last year, Chigurupati had moved the Company Law Board (CLB) for buy back of shares from Daiichi. In July, he filed a petition in the Andhra Pradesh High Court challenging the Foreign Investment Promotion Board’s (FIPB) approval allowing Daiichi to acquire 20 per cent stake from Zenotech’s public shareholders.
Both the High Court and CLB are yet to give a final hearing.
“Dr Jayaram Chigurupati has ceased to be the Managing Director of the Company upon completion of his term on September 30, 2012,” Zenotech said in a disclosure to the stock exchanges. Chigurupati wasn’t available for a comment.
In 2008, the Japanese giant Daiichi Sankyo gained control of Zenotech following its acquisition of Ranbaxy Laboratories, which held 47 per cent stake in Zenotech. Later Daiichi mopped up 20 per cent stake from Zenotch shareholders after seeking FIPB approval, taking its total shareholding to 67 per cent. Chigurupati holds 25 per cent stake, while the remaining 8 per cent is with the public.
In his petition with the High Court, Chigurupati questioned the validity of the FIPB approval to Daiichi arguing that it cannot give its nod to a foreign company to acquire stake in an Indian company without the requisite board approval of the Indian company.
He also accused Daiichi of mismanagement and non-payment of salaries forcing its 200-odd employees to quit.
In his petition with the CLB, Chigurupati sought its permission to buy back shares from the new management and even offered to pay Rs 130 per share on an average.