Ranbaxy board recast next week, Malvinder to be exec chairman

NEW DELHI: Ranbaxy Laboratories, India���s largest drug maker by revenue, is set to witness a major board restructuring next week following its takeover by Japan���s Daiichi Sankyo. A majority of its current directors are expected to be replaced and the size of the board is likely to be reduced from 14 members to 10, people familiar with the development told ET.

Ranbaxy CEO and MD Malvinder Singh will take over as executive chairman of the company, replacing his father-in-law Harpal Singh, who is currently the non-executive chairman.

The new board will consist of six representatives of Daiichi Sankyo, while the remaining four will be nominated by Malvinder Singh. As Mr Singh will be an executive chairman, five of the ten directors will have to be independent, as per the current Sebi guidelines, which stipulate that at least 50% of the board will have to comprise independent directors if it has an executive chairman. The changes are likely to be effected at the company���s next board meeting on December 19.

Ranbaxy COO Atul Sobti is expected to continue as a board member. Mr Singh���s other two representatives will have to be independent directors. At present the Ranbaxy board includes ex-CEO Brian Tempest, Malvinder���s younger brother Shivinder Singh, Religare CEO Sunil Godhwani, Ranbaxy executive director Ramesh Adige, as well as PS Joshi, Surender Singh, Vivek Bharat Ram, Vivek Mehra, Gurcharan Das and Ravi Mehrotra. Two other board directors, Nimesh Kampani and Vinay Kaul, are believed to have already resigned.

According to people with knowledge of the development, Daiichi Sankyo will nominate key senior executives to the Ranbaxy board. It too will have to nominate three independent directors. An industry official said that Daiichi Sankyo may also appoint a Ranbaxy veteran as one of its independent directors, though this could not be independently verified.

In June this year, when the Daiichi-Ranbaxy deal was announced, the Japanese company had said that Mr Singh would continue to head the company for at least five years. He will also become a member of the senior global management of Daiichi Sankyo.