Fairval

Notes on Indian equities, sectors and economy

What is cooking at Elder Pharma?

Posted by fairval on February 5, 2015

This blog has hinted earlier that something’s not quite right at Elder. Ever since the sale of part of domestic business to Torrent was announced in Dec’13, things have gone downhill at Elder.

Check the series of events:

30 June’14 – Transaction closure announced

30 June’14 – Independent director, Dr. Raghavachari Srinivasan resigns

1 Aug’14 – Independent director, Dr. J. S. Juneja resigns. He was also the non-executive chairman

11 Aug’14 – Independent director, Mr. Michael Bastian, resigns

1 Dec’14 – Independent director, Dr. Jayaram Subramanian, resigns

2 Dec’14 – New CFO appointed (old CFO left somewhere earlier, data not available)

8 Dec’14 – Company takes permission for AGM extension (financial year ends June)

11 Dec’14 – Independent director, Mr. Saleem Shervni, resigns

Why should it bother us?

Someone like SEBI or the stock exchanges like BSE or NSE should wake up and check why such wholesale exit of independent directors is going on, and why did the CFO leave.

All the more so, when the grapevine suggests that Elder is still in default of some outstanding debt, despite getting Rs 2000 crore (pre-tax) from Torrent. The company took a write off of over Rs 1100 crore from the money received from Torrent. Was this write off genuine, or should minority shareholders feel cheated?

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