New Delhi: Israeli drug maker Taro Pharmaceutical Industries Ltd, which was dragged to an Israeli court by majority owner Sun Pharmaceutical Industries Ltd for not disclosing financial details with shareholders for the last three years, has decided to conduct a shareholder meeting.
The move follows a letter from one of Taro’s large institutional investors Franklin Templeton Investments over the audit of Taro’s financial statements.
In a filing with the US Securities and Exchange Commission (SEC) on Tuesday, Taro Pharma said it intends to call an extraordinary general meeting of shareholders shortly, when it will update shareholders on the progress of the audits.
Taro had neither conducted a meeting of shareholders nor published financial annual reports since 2005. The company’s last available annual report on its website is for the year ended December 2005.
“A disclosure of financial statements by Taro would be a significant help for Sun Pharma to defeat Taro’s claims that Sun has undervalued the company in a 2007 share purchase agreement,” said a person tracking the legal battle between Sun Pharma and Taro over an unilaterally terminated acquisition deal.
In its SEC filing, Taro’s stated that Franklin Templeton had expressed concern over the delay in issuing its audited financial statements for 2006-2008 and that it had requested it to convene a shareholders’ meeting.
Sun Pharma, which has acquired a 36% stake in Taro, had last year filed a lawsuit in an Israeli court seeking an order instructing Taro to conduct shareholders meeting to share its audited financial details. A decision on the plea is still awaited.
Sun Pharma had in May 2007 agreed to buy Taro for $454 million. But, after a year, Taro unilaterally terminated the agreement alleging that the deal was at discounted valuation.
Since then, Sun Pharma has been fighting a legal battle to force the Israeli company to honour the deal. A tender offer issued by Sun Pharma to US-listed Taro shareholders is also pending due to the ongoing law suits.