Sun Pharma accuses Taro director of misusing funds

Says litigation against Sun is financed by Taro money. 

Sun Pharmaceutical Industries today accused Taro directors of misusing the company’s money on litigation and said it would hold them accountable once it acquired control of the Israeli firm. 

Sun Pharma and Taro have been locked in a legal battle after their $454-million merger agreement, signed in 2007, failed to materialise when the latter unilaterally terminated it in May 2008. Since then, the Levitt family, promoters of Taro, have been opposing a takeover bid by Sun. 

“Of course, as in the past, they (directors) are doing all these (litigation against Sun) using Taro’s money, in which they hold less than 12 per cent economic stake,” Sun Pharma Chairman and Managing Director Dilip Shanghvi said in a conference call with investors. 

Taro officials could not be reached for comments. 

In September, Taro had filed another case against Sun Pharma in a US court, alleging violation of non-disclosure agreement and misleading shareholders. Shanghvi said it was yet another excuse by Taro to not honour their agreement. “According to our lawyers, the Taro promoters are afraid of a judgment being pronounced by the Supreme Court upholding the lower court verdict of making one more brazen attempt to potentially create additional excuses for their dishonouring of the signed agreement.” Expressing confidence that Sun Pharma would ultimately prevail in the takeover battle, he said: “Once we acquire control of Taro, we will hold the directors accountable under the provisions of applicable law.”