Production at pharmaceutical company Zenotech Labs was suspended for the fourth consecutive day today with the employees continuing their strike.
The 200-odd employees of the Hyderabad-based company have been on strike since Tuesday for non-payment of salaries. Besides, there is a stalemate between the present owners and original promoters over the appointment of a second managing director.
Jayaram Chigurupati, managing director of Zenotech said non-payment of a bill of Rs 95 lakh towards supply of products to parent company, Ranbaxy, was the reason for not releasing the salary.
The company’s performance had dwindled after Ranbaxy took over the management control in 2008. Sales in the domestic market declined to Rs 6.5 crore as of March, 2011, from Rs 13 crore in the year of acquisition, he said. The company, which has a US FDA-approved bio injectibles facility apart from a normal manufacturing unit, has a portfolio of three biotech products and 10 oncology drugs currently being sold in the market.
It all started with the appointment of a second managing director by the new promoter, which owns 67 per cent equity in Zenotech. The move was questioned by Jayaram citing an agreement with Ranbaxy for his continuation as managing director for five years, which ends in November 2012.
Jayaram had sold half of his 57 per cent stake to Ranbaxy, which initially bought 2 million shares at Rs 100 per share and the rest at Rs 160 a share. Daiichi Sankyo, which subsequently acquired Ranbaxy, bought the shares at Rs 113, together holding 66.84 per cent equity in the company. Jayaram, who holds 26 per cent equity, maintained that he was willing to buy back all the shares at the cost it was sold to sustain and grow the company. He has already approached the Company Law Board in this regard
The eight-year-old company is also working on four drugs, two of which are under clinical trials while the other two are at the animal toxicology studies stage.
