Financial Daily from THE HINDU group of publications
Friday, May 03, 2002
Corporate - Announcements
Parke-Davis suspends Hyderabad operations
HYDERABAD, May 2
IN an interesting development, Parke-Davis (India) Ltd, the Rs 211-crore Indian subsidiary of the US pharma giant, Warner-Lambert Co, which recently got merged into Pfizer Inc, has decided to shut down the operations of its Uppal plant of Hyderabad, the only Indian manufacturing and research facility left with Parke-Davis.
The company had hived off its manufacturing facility located at Saki Naka in Mumbai a couple of years ago for a consideration of Rs 49.3 crore.
In a communique to the stock exchanges on Thursday, the Parke-Davis Company Secretary, Mr M.G. Subramaniam, said the voluntary retirement scheme (VRS) offered by the company at its Hyderabad plant resulted in reduction in manning of the plant.
"We have therefore commenced suspension of operations at our Hyderabad plant and have made alternate arrangements to ensure uninterrupted supply of our products," the company said. Interestingly, the VRS offered by the company was challenged by the former employees of Parke-Davis alleging that they were forced by the management to accept VRS under "coercion, economic duress, threat, undue influence, misrepresentation and fraud." The petitioners, belonging to the management cadre, submitted to the court that the VRS, which was forced on them, was not at par with the scheme followed by the company at its Mumbai unit earlier during 1997 and 1999.
The petitioners argued that if the merger of Warner-Lambert with Pfizer takes place in India, Parke-Davis, being the transferor company, would transfer all the existing liabilities to Pfizer. The claim of damages by the former employees of Parke-Davis would not reflect in the list of liabilities and creditors, they submitted to the court.
Following this, the court had directed the Parke-Davis management to furnish substantial solvent security against the claim of damages. As the Parke-Davis management failed to furnish the security within the deadline prescribed the court, the Bailiff completed the process of attachment.
With the Parke-Davis management moving the Andhra Pradesh High Court later, the attachment orders were vacated.
"However, the main suit filed by the former employees challenging the VRS is still pending before the district court," the counsel for the employees, Mr Simhadri, told Business Line.
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