Templeton cold to Taro’s plea for protection against Sun
22 Dec 2009
In its latest effort to fend off Sun Pharma's efforts to take over Taro, the Israeli pharmaceutical company has written to Mark Mobius, chairman of Templeton Asset Management Co, urging him to re-think his stand of supporting Sun Pharma. Templeton holds 10 per cent of Taro stock.
Though initially opposed to the idea of a Sun takeover, Mobius recently threw his weight behind the Indian pharma giant, citing Taro's lack of clarity in its financials.
Taro has now told Mobius the company has completed its audits for the years 2004, '05 and '06, and that audit for financial years 2007-09 would also be done soon. The Levitt family, which owns controlling stake in Taro, told Mobius the company was ''doing well operationally and financially''.
Taro also highlighted the example of Sun's takeover of Caraco in the US, which had to stop production due to FDA raids. ''Caraco is an unfortunate example of how Sun Pharma operates,'' it said.
Mobius though isn't impressed. ''We have been patiently waiting for Taro's audits for years,'' the investor told CNBC-TV18 in an interview. ''We still believe Taro is a good long-term investment. Only accounting is the main issue with the company,'' he said.
Mobius said two incidents served as red flags for him: ''We asked the Taro promoters to allow us to speak to the auditors regarding why the audits are taking time but were refused access. Then the management had a shareholder meeting in order to absolve the directors for the many responsibilities for the accounts.''
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