Cipla Medpro CEO Quits to Duck Hearing
October 8th, 2012 // 1:58 pm @ jmpickett
Just as a disciplinary hearing was set to get under way to probe “serious,†but unspecified allegations that were disclosed two months ago, Cipla Medpro ceo Jerome Smith has resigned, iAfricareports. And analysts speculation his departure may pave the way for a takeover of one of South Africa’s best-known drugmakers, which sells a variety of prescription and over-the-counter medicines.
In a brief statement, Smith described the board as “malicious,†and maintained that he was not going to waste money defending himself at the hearing that was set to begin today, the site reports. He declined to specify the charges or discuss the conflict with the board, saying he was planning legal action. “Legal proceedings (will) be brought by me in due course in which the relevant facts and circumstances may be revealed,†Smith told the site.
“A series of events has demonstrated unequivocally that the current board of Cipla Medpro – which I was required by my contract to serve – have rendered the continuation of a meaningful and trusting relationship an impossibility, and for me to attempt to continue to serve shareholders under these circumstances presents an intolerable state of affairs,†according to a statement cited by iAfrica.
The drugmaker confirmed his resignation, but so far has not issued its own statement. Smith founded Medpro Pharmaceutica in 1993, which became one of the first generic drugmakers in South Africa. He later struck an alliance with Cipla, one of India’s largest drugmakers, and built Cipla Medpro into South Africa’s third- largest pharmaceutical manufacturer based on value.
The board has not publicly discussed the reasons for his suspension (back story), but the move pressured the stock price and reportedly nixed talks with another drugmaker, believed to be Cipla. The South African drugmaker is now being investigated by the Takeover Regulation Panel for the way it handled the potential deal, following a complaint filed by Smith on behalf of shareholders, iAfrica writes.
