labels: pharmaceuticals, morepen laboratories
Morepen defaults on FDs; hit by slump in Loratadine pricesnews
Venkatachari Jagannathan
17 April 2003

Chennai: Fixed depositors of Morepen Laboratories can keep their fingers crossed while waiting for the courier to deliver their matured fixed deposit cheques.

For, the New Delhi-based company has been defaulting on payment of matured fixed deposits since February 2003. Further, the company''s interest warrants are bouncing back to the depositors like rubber balls.

Anil Khandelwal, vice president (finance), says: "It''s true that there were few occasions when fixed deposit repayments as well as interest warrants were returned by one of our banks for want of sufficient funds. This had happened primarily due to delayed high value clearing and few technical delays in transfer of funds to the respective bank accounts." According to him the issue has been completely addressed and there is no outstanding on this account while the issue of fixed deposit repayments are being addressed to on a day-to-day basis. Even most of this stands cleared as of now.

In January 2003, when Morepen''s interest warrants were dishonoured by ICICI Bank, the company switched its account to Corporation Bank (See ).

While many investors got worried about the non-receipt of deposit proceeds upon maturity or any related communication, Khandelwal insists that Morepen has been communicating with its investors to minimise the complaints on this account.

It is learnt that the company held an investors'' meet in Mumbai recently and plans to have similar ones in Ahmedabad, Chennai and Bangalore.

According to Khandelwal, the company''s cash projections went off the track as the price of its main product, Loratadine, went down by more than 70 per cent after it became an over-the-counter (OTC) product.

In February 2003 Morepen announced that it would generate around Rs 100 crore and an additional net profit of Rs 60 crore from Loratadine supplies to Geneva Pharmaceuticals, the generic arm of Novartis AG.

"We have a very strong order position as of now for Loratadine as well as few of our other block buster bulk drugs and expect a good market share in the near future, particularly in the free market," he says.

About the proceeds of the Rs 72.5-crore global depository receipts (GDR) issue on the Luxembourg Stock Exchange, Khandelwal says the statutory requirements for transfer of GDR proceeds to India is expected to be over by this month end.

also see : ICICI Bank creates scare amidst Morepen Lab depositors

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Morepen defaults on FDs; hit by slump in Loratadine prices