Daiichi Sankyo deprives Ranbaxy Lab shareholders of Rs.2100 Crore.Intervene SEBI / Reserve Bank of India

Emailed to :sebinro@sebi.gov.in at 2.15 P.M IST on 09.10.08

Also to Reserve Bank of India

rajkumarojha.blogspot.com: SEBI and the Reserve Bank of India the regulators of the stock market and the Money Market may please note that the Diachii Sankyo buyback deal of Ranbaxy Lab Ltd in June 2008,at that point of time the deal was worth about Rs.21000 at the then prevailing rate Dollar/Yen viz a viz Indian Rupee which at that point of time was about Rs.42.5 to a US dollar

The present prevailing rate of Rs.47.5 or Rs.47.00 to a dollar Daiichi has gained Rs.2100 Crore roughly 10 % of the buyback amount which they shall pay less and still the deal is through. Daichii shall pocket RS.2100 Crore all at the cost of the shareholders of Ranbaxy.

I respectfully bring to the kind Notice of RBI/SEBI that RBI has still not approved of the deal as it has not put its stamp of approval till today. I make this assertion only on the basis of Email received by me from ICICI Securities Mumbai the Managers to the buyback issue, on 08.10.08 at about 6.00 PM IST

The Email is reproduced hereinbelow verbatum :

"Wth respect to your queries, please note that the CCEA approval has been obtained and currently we are awaiting for the RBI approval. The rate of interest for the delay (from September 20, 2008) shall be 10% per annum on the offer consideration. Once we get a go ahead from RBI, the payment shall be dispatched shortly (roughly 4-5 working days after that, depending on logistics such as printing duration etc) after that.

Trust the same shall suffice.

best,
aakash
Aakash Swaroop
Senior Associate
Corporate Finance
ICICI Securities Limited.
ICICI Centre, HT Parekh Marg
Churchgate, Mumbai 400 020
Board No.: +91 22 6637 7100"

An analysis of the information provided demonstrates that RBI is still sitting tight. over the issue, even when the Union Cabinet and CCEA has put its seal of approval on 03.10.08.

I suggest to the RBI/SEBI that on the date on which the approval is stamped by RBI ,should be the date of final settlement , and currency price fluctution , in the instant case Rs.2000 Crore, shareholders of RANBAXY be directly rewarded and under no circumstances the buyer DAIICHI SANKYO JAPAN be permitted to gulp the amount and in this way they should set an example of GOOD MANAGEMENT PRACTICE and INVESTOR FRIENDLY MANANGMENT.

I further empathetically state that the model mode of Calculation be the Total Numbers of shares purchased through buyback (which in the instant Case is 9.2 crore of Equity shares of Ranbaxy of face value of Rs.5.00 each) be divided by the Currency fluctuation Amount (Rs.2000 Crore in thte instant Case) the resultant amount per share be added to the already declared buyback amount per share, thus in the present scenario Each shareholder who has tendered his shares against the buyback , should be paid an agreed amount Rs.737 per share in the instant case) plus the resultant amount .

Daichii Sankyo Japan has come up with a vague sggestion that it is going to pay 10 % interest for the delay,( say the delay is one month), the shareholders are going to receive, a petty sum, as interest amount on a pro rata basis viz a viz currency fluctuation saving amount of Rs.2100 Crore, and I feel that it is a clear case of unfriendly market practises right under the nose of the CAPITAL/MONEY market regulator SEBI/RBI.

Had there been a reverse situation then the declared buyback price per share ,should be the final price .

Alernatively the currency fluctuation amount, the purchaser be directed to deposit under the head , Reserve and Surplus , account of the company, and the shareholders having residual no: of shares be permitted to gain.

Let the Market Regulator, SEBI, RBI, NSE, BSE, Investor Associations,Investors and shareholders of respective Companies, Finance and Law Ministry of the Union Government PONDER OVER a MATTER as serious as Rs.2100 Crore deprivation to shareholders of Ranbaxy Lab Ltd by the purchaser Daiichi Sankyo Japan , a pharma major.