Malvinder Singh Writes to the Late Dr. Parvinder Singh on Ranbaxy Sellout

17 06 2008

June 12, 2008 

Tokyo 

Dear Papaji, 

Sat Sri Akal!

It is with a heavy heart I wish to inform you that I have just sold our family’s stake in Ranbaxy to a Japanese company, Daiichi Sankyo (DS). You may remember Sankyo, now it is Daiichi Sankyo.

 

The decision was not easy. I was constantly remembering you and thinking, what you would have done if you were faced with a similar situation. I had no plans of selling out. In fact, I had come to Japan looking for a partner for our R & D venture. One thing led to another and I found DS willing to partner us, only if they had a controlling stake in Ranbaxy.

 

I came back to Delhi and discussed with the family members. I told them that they are giving us a good offer, only if we sell them our entire stake. Honestly, it was not the money alone that was tempting. You have left enough money for us. But it was the entire set of circumstances.

 

Increasingly, business has become very difficult. In our generics business, which you built to a global scale, we are having serious margins pressure. Our success in litigations on patents in US is going down. We haven’t made much headway with our R & D after you left us. In fact, ever since Rashmi ( Dr Barbhaiya) left us, our R & D is directionless. The stockmarkets have also got wind of all these problems and during the bull-run in Indian markets after you died, Ranbaxy stock is just languishing.

 

You will accept that, along with the global pharmaceutical company, that we inherited from you, we also inherited the family disputes. The disputes you had with your father and brothers are still unresolved. Chacha Analjit has not forgiven you to this day and never leaves a chance to get back at us. These disputes take a lot of my and Shivi*’s time.

 

Shivi is doing pretty well with the Fortis Hospitals business, which you had started in a small way. He wants to make it a national chain. Religare ( which was known as Fortis Financial in your time) is also showing good promise. Both these businesses will do much better, if we infuse capital. 

 

Thinking all of the above, I thought that this was a once-in-a-lifetime opportunity. So I decided to accept the offer. I know you had a  dream of making Ranbaxy an Indian MNC. Now it will be a subsidiary of a Japanese MNC. You will be happy to know that they have agreed to retain the Ranbaxy name.

 

I have also negotiated a good deal for myself. They have retained me as the MD and CEO for five years. I know it is not going to be easy, reporting to the Japanese managers. I am used to being an owner-manager. Their slow consensual decision making is surely going to get on my nerves. I am sure, they will appoint a number of Japanese managers all around me. Sooner, rather than later, I will be a puppet in their hands. I have seen this in Maruti. But atleast I will be the public face of Ranbaxy. I can retain the family honour this way. If things get diffcult for me, I will not stay on for the full-term. By then the spotlight will be out of Ranbaxy and I can go on to do something else.

 

I think, the Indian media and the CII-types are not going to like this deal. They will feel let-down.Ranbaxy is often taken as an example of  Indian pharma’s success story. I have learnt from you, that ultimately, the company, our family and our shareholders matter. This deal is good for all of them. Let the chatterati keep talking.

 

Emotionally, it was very difficult to let go. Ranbaxy and our family identity is so intertwined. But logically, I found that it was in the best interest of all of us to let go. I hope you approve of this.

 

By writing this letter, I feel a great sense of relief. Please forgive me, if I have disappointed you. Seeking your blessings for my future endeavours.

 

Yours affectionately, 

Malvinder.

 – G. Mohan.

Disclaimer: If at all a disclaimer is needed, the letter above is a pure piece of fiction.

 

 

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3 responses

23 06 2008
Shuvendu Dey

The sellout by Ranbaxy group is a black spot in the corporate history of india, ironically at the juncture when the national economy is booming like never before. Today when the who’s who of the business world in the developed world are collectively looking at India (and China) to bail them out from the clutches of an economic recession triggered by myriad events like the subprime crisis of the US and the monstrously rising crude price, this show of abject and needless surrender by Malvinder has hit us all very hard. It is not merely a corporate sell out, it is also a national sell out.

19 07 2008
Chirag

Great piece of letter you conjured up! Looking forward to more of such ficticious letters…

24 05 2009
G.Mohan

When Malvinder Singh’s family sold off their stake in Ranbaxy, he had negotiated to continue as the MD for five years. After that Ranbaxy has been facing one bad news after another. USFDA, dollar losses, poor sales etc. The price of the Ranbaxy share is less than a third of the price it which it was acquired by the Japanese firm.

Little wonder that Dai-ichi board has realised that they have been sold a lemon.How could they allow Malvinder Singh to continue at the helm of affairs for five years.

So today the news is that Malvinder Singh has stepped down as Ranbaxy’s MD even before completion of one year.
http://economictimes.indiatimes.com/Corporate-Announcement/Ranbaxys-MD-Malvinder-steps-down/articleshow/4572033.cms

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