Aurobindo duo hit by Jagan fallout

HYDERABAD: Implication in the Jagan Mohan Reddy case has left its mark on Aurobindo Pharma Ltd (APL).In a damage limitation move, the company on Wednesday rejigged its senior management, dropping promoters P V Ramprasad Reddy and K Nithyananda Reddy (accused no. 7 in Jagan illegal assets case) from executive roles.Sources said the company has come under tremendous pressure from investors to replace its top brass, not only to ensure smoother day-today ops but also to clear the company’s name from the ongoing CBI investigation.The probe has come as a blow to the company, which has been reeling under severe losses.The alleged involvement of its senior management has sent the company’s stock on a downward spiral.For the quarter ended March 2012, APL reported a 13.6 per cent dip in net profit at Rs 108 crore.Owing to a bleak business environment, the management deferred its 2015 sales projections of $2 billion by another year.Interestingly, Trident Life Sciences, part of APL and run by P Sarath Chandra Reddy (accused no.8), is also the under the CBI scanner According to APL, Ramprasad Reddy will relinquish the role of executive chairman from June 1 while Nityananda Reddy will resign as MD.They will, however, be inducted into the board as a wholetime director and VC respectively.The appointments, however, are subject to shareholders’ approval.K Raghunathan, independent director, has been appointed as the non-executive chairman while N Govindarajan, presently CEO (API & CRAMS division) will take over as director & MD, and Ravindra Y Shenoy as director & joint managing director.The company’s troubles started when the US FDA first issued a warning letter in May 2010 followed by an import alert in February 2011 for its cephalosporinproducing unit-6 in Hyderabad.The global economic slump, the ongoing Eurozone crisis and the Telanagana agitation in 2010 dented the company’s profits.The promoters have been steadily pledging shares to tide over the woes.They pledged nearly half, i.e.  22.28 per cent, of their total 54. 76 per cent stake in the company.