The Hindu Business Line : Sun Pharma fires next salvo against Taro

Sun Pharma has written to Taro Pharmaceutical's shareholders urging them to vote against the election of Taro's proposed board of directors at the latter's annual meet scheduled for December 31.

The two companies remain locked in a cross-country legal battle over Sun Pharma's $ 454-million proposal to acquire Taro. The two companies had signed a merger agreement in May 2007, but a year later, it was terminated by Taro.

In a strongly-worded letter, Sun Pharma's Chairman and Managing Director, Mr Dilip Shanghvi, said that Taro shareholders did not have reliable financial data on the company for almost seven years, starting 2003.

"This failure is a result of the performance of these supposedly independent directors, as members of the board, in discharging their fiduciary duties towards shareholders. Instead of working to correct the situation, they now want all Taro shareholders to pay for any damage claims made against them for this failure," he said.

Given this backdrop, Taro shareholders should also vote against the proposal to seek approval for an undertaking by Taro to exempt from liability, and to widely expand indemnification for the current and certain former directors, the letter added. The Levitt/Moros family owns only an 11 per cent economic interest in Taro.

Sun had invested $ 60 million in the form of an equity investment, on the request of Taro's Chairman, the letter said. This was in exchange for the option to purchase Taro shares held by the Levitt/Moros family at $7.75 a share if the merger was not consummated, it added.

Related Stories:
Worries over Sun-Taro impasse
Taro sues Sun Pharma in US
Israel's Supreme Court to decide on Sun-Taro spat

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