New Delhi (Reuters) - Japanese drugmaker Daiichi Sankyo said Malvinder Singh, chairman and chief executive of its Indian unit Ranbaxy Laboratories, had resigned and named replacements for him on Sunday.
On May 12, Japan’s third-biggest drugmaker forecast its full-year profit would be well below expectations, blaming losses at Ranbaxy and saying it planned to get actively involved in resolving its unit’s problems.
Non-executive director Tsutomu Une was named chairman while Atul Sobti, Ranbaxy’s chief operating officer, was promoted to chief executive and managing director.
New chairman Une told reporters the move was aimed at “accelerating growth” of Ranbaxy. “The separation was amicable.”
Ranbaxy has been hit by a U.S. ban on some products for alleged falsification of data, and by foreign exchange hedges being hit by a weaker rupee.
Last year, Daiichi Sankyo bought a 63.9 percent stake, including the founders’ entire stake, in Ranbaxy, aiming to take advantage of rising demand for generic drugs.
But the stake lost more than two thirds of its value by the end of financial year primarily hit by the weak rupee and the U.S. FDA ban. Last month, Ranbaxy forecast a loss of $150 million in 2009, on a 9 percent fall in sales to $1.4 billion.
Ranbaxy and Daiichi Sankyo have said they are working with the U.S. FDA, and new CEO Sobti said the company was on track to meet with the FDA soon. The firm also said there was no plan to delist Ranbaxy.
Malvinder Singh’s exit came within a year of selling the company his grandfather began building half a century ago.
“It was a difficult decision to separate from Ranbaxy,” said Singh, who took over as chief executive in 2006.
Earlier, the Economic Times daily said Singh’s tenure at the helm was scheduled to end in 2013 and he was entitled to a severance package of 450 million rupees ($9.6 million) if he left the company before. Une, when asked about the severance package, said the company would proceed according to the employment agreement. He did not elaborate.
Ranbaxy shares are down 12.5 percent so far in 2009 compared with a 44 percent rise in the benchmark index
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