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`Irregularities' in UK arm -- ED seeks details from Ranbaxy

Our Bureau

NEW DELHI, Aug. 10

THE Enforcement Directorate has sought details of the financial irregularities which led to the sacking of the management team earlier this year at Ranbaxy's UK subsidiary.

Mr Gingee N. Ramachandran, Minister of State for Finance, recently informed Parliament that details have been called for by the ED from financial institutions and stock brokers based on SEBI's interim report.

A Ranbaxy spokesperson told Business Line that the company had not heard yet from any of the Government agencies. However, he added, that a new team, headed by Mr Sugato Bhattacharya, had already been appointed as the new head of the UK-subsidiary and th at it had also recovered the money lost due to the irregularities. Mr Bhattacharya was earlier with Ranbaxy's Vietnam operations.

Declining to divulge the actual loss made by the company, the official said that RKUL was a profit-making company. The UK-subsidiary had posted a sales turnover of $21.6 million for the year ended December 2000, representing a growth of 41 per cent over the previous year.

Responding to queries on the issue, the company in a faxed statement said: ``During the course of RKUL's internal audit early this year certain discrepancies were detected primarily on account of bonus goods and trade discounts to certain customers. The regional management based at London investigated the matter and took steps for recovery; practically the entire amount involved has been recovered and accounted for in the current year.''

Ranbaxy has business operations in 24 countries, with manufactuing bases in six countries and together with its operating subsidiaries and affiliates had posted a sales of $507 million in 2000. This was up 17.4 per cent from the previous year's sales of $432 million.