Ahead of its annual general meeting on 31 December, Israeli drug firm Taro Pharmaceutical Industries Ltd on Friday once again urged its shareholders to reject a takeover bid by India's Sun Pharmaceutical Industries Ltd.
Taro, which has been warding off a takeover bid by the Indian company ever since their proposed $454-million merger deal was called off in 2008, harped on the mess that Sun has made of Caraco Pharmaceutical Labs, the US company in which it acquired a majority stake in 2004.
''Sun has been bad for Caraco and Sun could be disaster for your investment in Taro,'' Taro chairman and managing director Barrie Levitt said in a letter to shareholders.
In June this year, US regulators had banned Caraco from selling drugs made at its three US plants after seizing 33 drugs and raw materials, citing deviation from manufacturing standards.
''You should be aware of the serious corporate governance and legal controversies facing Sun as a result of its stewardship of Caraco, a US-based company in which Sun controls a majority of the shares,'' Levitt said. ''We believe that Sun's conduct at Caraco raises serious questions about what may happen to minority shareholders of Taro if Sun is able to gain control of your company.''
Levitt further said in his letter, ''In eighteen months, Caraco's stock price has declined over 65 per cent, from $17.22 as of 30 May 2008 to $5.89 as of 10 December 2009, and lawsuits by unhappy Caraco shareholders ensued.''