kolkata: It’s been two months since Kolkata-based personal care products manufacturer Emami Ltd announced it had acquired 24% stake in Zandu Pharmaceutical Works Ltd from descendants of its principal founder, but the 98-year-old, Mumbai-based herbal health care firm has not yet registered Emami as the “rightful owner” of the shares it bought from the Vaidyas.
“The company is still awaiting succession certificate (from the sellers),” Zandu’s non-executive chairman Y.P. Trivedi said when he was asked why the share transfer hadn’t been registered in the books of the company.
The company’s managing director Girish Parikh was not available for comment.
Devkumar Vaidya and his sister Anita Vaidya, descendants of Jugatram Vaidya, who founded the firm in 1910, sold their 24% stake in Zandu towards the end of May. Emami had earlier acquired 3.5% of the company’s shares from the market, and its stake will go up to 27.5% when Zandu recognizes the sale by the Vaidyas.
While refusing to register the share transfer, Zandu’s management moved markets regulator Securities and Exchange Board of India, or Sebi, saying the Parikh family, which runs the company, had the right of first refusal in respect of the shares sold by the Vaidyas.
Asked if the right of first refusal claimed by the Parikhs was recorded in the company’s articles of association, Trivedi said, “I don’t think so. They are playing it morally… because they have been together for so many years.”
Sebi hasn’t disposed of the petition as yet, nor has it cleared Emami’s open offer for 20% more of Zandu’s shares, which was supposed to open on 24 July. The open offer was triggered by the acquisition of shares from the Vaidyas.
Asked about the open offer, Emami’s director Harsh V. Agarwal said, “We are still waiting for Sebi’s clearance. We hope that it’s soon going to be cleared.”
Meanwhile, Zandu’s management has moved the Company Law Board, or CLB, as well. The allegations made were similar, said a person familiar with the petition, speaking on condition of anonymity. But the board refused to hear it, and asked it to move Sebi instead, he added.
Emami’s director Agarwal confirmed that Zandu had moved CLB challenging the acquisition of stake, but refused to elaborate.
Emami wants to wrest control of Zandu. Its chairman R.S. Agarwal had earlier told Mint that his company wants the Parikhs, who own a little more than 20%, to either sell out or offer board berth to Emami.