Zenotech founder seeks to buy Daiichi stake for Rs300 crore

Giving a new twist to the Zenotech-Ranbaxy saga, the founder-promoter of Zenotech Laboratories, Jayaram Chigurupati, has moved the Company Law Board (CLB), asking it to allow a buyback of shares from Daiichi.

Daiichi, which has control over Ranbaxy, has also acquired control over Zenotech post its Ranbaxy deal. Currently, Daiichi and Ranbaxy together hold about 67% of the ¤34.4 crore equity of Zenotech. Chigurupati holds another 26%.

According to Chigurupati, he would buy back the entire 67% from Daiichi at Rs130 per share, the price Daiichi had paid to acquire stake from Chigurupati.

“I have offered to buy the entire holding of Daiichi in Zenotech at the same price, which works out to an average of Rs130 a share, which they had offered to shareholders in 2008,” Chigurupati told DNA.

The price that is being quoted by Chigurupati pegs the deal value at about ¤300 crore. “I have my associates, too, to support the deal if it is cleared by the CLB,” he said.

According to him, the new management put in place by Daiichi is “destroying” Zenotech. “The employees are suffering. They were not paid their salaries. Zenotech’s products are not being properly marketed. The company and the employees are suffering badly.

There are many such issues that are forcing us to go for a buyback. I regret selling a part of my holding to Daiichi-Ranbaxy in 2008,” he said.

The application filed by Chigurupati on buyback is expected to come up for hearing at the CLB on Tuesday.
  
However, Chigurupati suffered setbacks at the CLB couple of times earlier and the recent one pertained to contesting the Ranbaxy’s appointment of B K Raizada as the managing director of Zenotech.

While Chigurupati claimed that there was an agreement with Ranbaxy for his continuance as MD of the company, the CLB passed orders in favour of Ranbaxy on April 20 upholding the appointment of Raizada as MD, saying the law doesn’t prevent a company from having two MDs.

Meanwhile, about 120 full-time and about 30 part-time employees of Zenotech have declared that they are on an indefinite strike protesting the practices of the new management. According to the employees, they were not paid the salaries for April and the future of the company too has turned unpredictable.

The employees are alleging that Ranbaxy had gone back on its assurance about marketing Zenotech’s products. Zenotech has about 13 products including three biotech and 10 oncology products. According to sources, representatives of Ranbaxy have reached Hyderabad and held discussions with the striking employees as the employees kept off the work for the third consecutive day.

“We have three key demands. These include an assured annual business Rs15 crore a year as promised earlier, a revival package for the company and handing over the management affairs to a professional managing director who has experience in both research and development and manufacturing,” an employee representative said.