Ahead of IPO, ED asks Gland Pharma to transfer shares held by Ramalinga Raju

Source :Sify
Author :Finance Desk
Last Updated: Thu, Nov 5th, 2020, 00:00:55hrs
Enforcement-Directorate-sifydotcom

Hyderabad: Gland Pharma will transfer six million shares owned by companies promoted by Satyam Computers' B. Ramalinga Raju and his kin to an escrow account on the direction of the Enforcement Directorate (ED), a top company official said on Wednesday.

The development comes ahead of Gland Pharma's Initial Public Offer (IPO) announcement. Subscription for the IPO commences from November 9 2020 onwards.  

Srinivas Sadhu, MD and CEO of Gland Pharma, told reporters during a virtual press conference that they are following the directions of the ED. He clarified that these shares are not part of the IPO.

The ED had attached the shares held by Raju and his kin after multi-crore scam broke out in Satyam Computer Services Ltd in 2009. It had directed Gland Pharma not to transfer, dispose, remove, part with or otherwise deal with them in any manner until further instruction from it.

With the Hyderabad-based pharma company, controlled by Chinese pharmaceutical giant Shanghai Fosun Pharma, planning an IPO, the ED directed it to transfer the shares.

Gland Pharma on Wednesday announced that IPO to raise almost Rs 6,500 crore will open on November 9. This is one of the largest IPOs in India's pharmaceutical sector. The firm has set a price band of Rs 1,490-1,500 per share (face value of Re 1).

At least 10 firms owned by Raju and his family members held 600,000 shares with Rs 10 face value. They subsequently became six million with each share's face value of Rs 1.

The shares attached by ED are 3.87 per cent of the pre- offer paid-up equity share capital of the company. The company made it clear that the 10 firms which hold the shares are not related to Gland Pharma or its promoters, promoter group, directors or key managerial personnel.

Sadhu does not foresee any impact on the company in view of the restrictions being imposed by India on Chinese companies. He said Gland Pharma into healthcare sector and it grew under different investors.

"We don't foresee any impact," he said and pointed out that Gland Pharma sell its products to several companies around the world, mostly in the US.

It was in 2017 that Fosun Pharma had acquired 74 per cent stake in Gland Pharma, which was founded by P.V.N. Raju in 1978.

With inputs from IANS