IT raids cap series of setbacks for Aurobindo

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posted on 12 years ago — updated on 1 second ago

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HYDERABAD: The raids by the Income Tax (IT) Department are the latest blow to hit Hyderabadbased Aurobindo Pharma in the last year..

HYDERABAD: The raids by the Income Tax (IT) Department are the latest blow to hit Hyderabadbased Aurobindo Pharma in the last year or so. Founded in 1986 by P V Ramaprasad Reddy and K Nityananda Reddy, the company has weathered a number of troughs in the past year.
First, the US Food Drug Administration (FDA) pulled up the company for violation of the Common Good Manufacturing Practices (CGMP). Next, it was the turn of the drugs controllergeneral of India (DCGI) to suspend the licence of an Aurobindo subsidiary, Axis Clinicals, for irregularities in the conduct of bioavailability and bioequvivalence studies.The company then came under the CBI lens, allegedly for securing quid pro quo allotment of land at throwaway prices from the government of Y S Rajasekhara Reddy in return for investment in the late chief minister's son Jagan Mohan Reddy's company Jagathi Publications.

However, refuting these claims, Aurobindo chairman P V Ramaprasad Reddy then told Express that the company did not itself invest in Jagati or in any of its associate firms. "K Nityananda Reddy (MD of Aurobindo) invested Rs 7 lakh in Jagathi Publications in his personal capacity. But the company has nothing to do with that," he had said, adding, "We were alloted 75 acres in Jadcherla for an SEZ as per protocol and did not seek any favours from the then government."

Aurobindo promoters have also been pledging their stake steadily. As of Dec. 2011, they pledged 20.54 per cent, up from 14.37 per cent in Sept. 2011. They hold 54.73 per cent stake in the company, while the remaining is with mutual funds, financial institutions and the public.