The long running battle over the future of Zandu Pharmaceutical Works has been tossed back and forth between India’s Company Law Board (CLB) and Bombay High Court over the past two months.
The dispute centred on a takeover bid by Emami for Zandu, which has been opposed by the co-promoter of Zandu, the Mumbai-based Parikh family. The matter is now to be settled by the Securities and Exchange Board of India (SEBI), after the CLB and high court argued that they had no jurisdiction over the issue.
Zandu has been warding off a take-over bid by Kolkata-based Emami, which bought a 24% stake in Zandu from another co-promoting family, the Vaidyas, in May this year. Emami later announced that it had bought the Vaidyas’ stake through a share purchase agreement, taking its total stake in Zandu to 27.5%.
The Parikhs, who hold nearly 25% of Zandu, then approached SEBI and the CLB to stave off Emami’s attempts to get a foothold in the company. The Parikhs have claimed that they enjoy the right of first refusal in the case of sale of shares by the Vaidyas and therefore, the transaction was illegal. However, the CLB advised Zandu’s promoters to take up the issue with SEBI.
Zandu Pharmaceuticals’ chairman and leading corporate lawyer YP Trivedi confirmed the legal tussle between the Parikhs and Emami. He told the Economic Times: “I am against any litigation. Litigation is always useful only for lawyers. I have asked both the parties to sit together and resolve all the differences.”
Emami has appointed law firm Kanga & Co while Zia Mody is representing the Parikhs.