Trouble mounts for ELDER Pharma with the passing of MD
MUMBAI: The demise of the Managing Director and Chief Executive Officer Alok Saxena of Elder Pharmaceuticals recently has indeed brought more trouble for the debt-stricken pharmaceutical firm. Alok (52) was the elder son of Elder founder late Jagdish Saxena who passed away in October 2013.
The company has been caught up in the controversies over last three years from a family dispute to defaulted fixed deposit payments to investors and depositors, delayed wages to workers, allegations of bribery against company top-brass and wrap up petitions in the Courts against the company
With popular brands like Shelcal and Tiger Balm, Elder Pharma was a successful company in the Indian pharmaceutical landscape, yet suffering from a large debt. Elder inked a Rs 2,004-crore deal to sell its branded drugs business in India and Nepal to Torrent Pharmaceuticals in December 2013 which was expected to bail out Elder Pharma then saddled with a Rs 1,300-crore debt.
Chief Operating Officer of Elder Pharma and younger brother of Alok, Anuj Saxena, the heads Elder Health Care and is also an actor, having played lead roles in Hindi television serials had been accused for offering of bribing former Ministry of Corporate Affair official B.K. Bansal to ensure that he does not order an SFIO inspection against his firm on charges of illegal collection of Rs 175 crore from 24,000 investors, diversion of funds to companies abroad and not giving returns on time.
Read also: Court rejects Elder Pharma officials anticipatory bail in bribe case
In August 2016, Anuj had been taken into custody after which officials anticipatory bail was filed by Elder Pharma which had been rejected by the court saying that his custodial interrogation is a must. It is also reported that anticipatory bail got opposed by CBI in Delhi court and Delhi court had rejected the plea in October 2016.
In June 2017, Elder Pharmaceuticals had filed for insolvency, in an attempt to restructure its debt. The Company began disintegrating after the demise of founder Jagdish Saxena and a family feud that followed.
The company had an unpaid debt of around Rs 1,000 crore as on end of June 2014 and had suffered a loss of Rs 51 crore in the quarter ended March 2015. In addition to this, trading of its shares had been suspended on the bourses. It was the last intimation by Elder to the BSE on its financials.
Read also: Elder Pharma files for insolvency
Crossing over as part of the deal was Shelcal, and then estimated to be a Rs 170-crore brand, besides 30 others in segments including women’s healthcare, pain management, wound care, and nutraceuticals. Elder’s management then said that they were left with 25 in-licensing deals and its exports business.
Elder tried to salvage its reputation by planning for life beyond the Torrent acquisition of its brands. The company had businesses in the United Kingdom, Ghana, and Bulgaria, from acquisitions in these countries reports The Hindu
In October 2015, Elder Pharma said it would repay its creditors and investors by raising funds through a combination of debt, equity and asset sale which included the sale of its stake in its subsidiaries in the UK and Bulgaria.
Elder Pharma has long been plagued by speculation of being up for sale, factories, assets and all. Its published total income stands at Rs. 25 crores, up to March 2015 with a net loss of 51 crores.
A company insider told The Hindu that with the passing of Elder scion Alok Saxena, the future of the remaining employees with the troubled drugmaker plunges further into uncertainty.