Ranbaxy’s troubles with its Hyderabad subsidiary, Zenotech Laboratories, took another turn today, with the nearly 200 employees going on strike, complaining of non-payment of salaries.
Production has been stopped in the Zenotech plant and research and development operations suspended for an indefinite period, employees said. The firm specialises in biotechnology medicines and sells its products by using Ranbaxy’s marketing network.
Ranbaxy had taken majority equity in Zenotech, after which the former was acquired by Daiichi Sankyo of Japan. There has been a long legal dispute between minority shareholders led by Zenotech’s founder-promoter and longtime managing director, Jayaram Chigurupati. Last week, the Company Law Board (CLB) ruled in favour of the appointment of a Ranbaxy nominee, B K Raizada, as MD. Chigurupati has challenged this decision in the high court at Hyderabad.
While the employees accuse Ranbaxy of not providing financial support to Zenotech, its two MDs are blaming each other. Raizada said Zenotech did not have any funds to pay salaries and he was not getting any assistance from Chigurupati and his team in managing the crisis through external funding.
Chigurupati said the crisis was the creation of Ranbaxy, as it had not paid pending dues of Rs 95 lakh to Zenotech. According to him, Ranbaxy, the exclusive marketing partner of Zenotech, has not cleared the March bill.
He also alleged the re-constituted Zenotech board had taken away his powers as a ‘signatory’, preventing him from signing cheques or infusing personal funds as a temporary solution.
Employee representatives, preferring anonymity, said they have written several letters to Tsutomu Une, chairman of Ranbaxy, seeking assurance of pay and clarity on the future of the company after the recent shuffle in the Zenotech board. They said the strike was a final resort to find a solution.
Asked to comment, a Ranbaxy spokesperson said: “Ranbaxy and other shareholders have entrusted the management of Zenotech to the legitimately and legally appointed Board of Zenotech.” The fight between Chigurupati and Ranbaxy started after Daiichi Sankyo acquired majority shares in Ranbaxy in 2008. This triggered an open offer from Daiichi for Zenotech shares, too, as Ranbaxy was the largest shareholder in that company. However, Daiichi did not offer the price which Zenotech shareholders led by Chigurupati demanded.
