The battle for control for Taro Pharmaceutical Industries Ltd. (Pink Sheets: TAROF) between chairman Dr. Barrie Levitt and Sun Pharmaceutical Industries Ltd. (BSE: 524715) is also conducted in letters to shareholders. Today, Sun Pharmaceutical chairman and managing director Dilip Shanghvi sent a letter to Taro's directors, asking them to stop supporting Levitt.
Commenting on Taro's annual general shareholders meeting on December 31, 2009, Shanghvi wrote, "The results of the voting show that over 75% of votes cast by Taro shareholders who are not aligned with the Levitt family or with Sun have rejected the continuing control of the Levitt family and their designees to Taro's board of directors. It is now clear that an overwhelming majority of Taro's public shareholders demand a change in the control of Taro and the composition of its board of directors.
"Your repeated claims that you initiated and continue to maintain the ongoing legal proceedings against Sun in order to protect this minority are completely untenable. It has been apparent to Sun from the beginning that your real interest in commencing the various litigations on behalf of Taro against Sun was and remains your misplaced and unexplained desire to help only the Levitt family avoid their contractual obligation to sell their shares in Taro to us. Now Taro’s public shareholders have come to recognize this fact. These litigations have done nothing to advance the interests of the "silent minority shareholders" of Taro, as you have wrongly claimed, but have instead done them a disservice."
Shanghvi concludes, "In light of these results, and with any residual sense of your fiduciary duties as directors, we expect that you will now reconsider and reverse your position regarding these actions. Failing to do so, and continuing to provide active support, with Taro funds, to the Levitt family in its attempt to avoid its contractual obligations towards us, will constitute a further breach of your fiduciary duties to Taro as well as its shareholders."
Shanghvi warns that Sun Pharmaceuticals "will take all necessary legal action to reverse the cynical attempt by the Levitt family to reward you, again with the funds of Taro, for the actions you have taken at their behest by purporting to ratify and expand your indemnification agreements. We are confident that the Israeli courts will reject this unwarranted raid on Taro's treasury."
Taro's share closed at $9.30 in New York on Friday.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2010
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