Templeton Asset Management, a key investor in Israel’s Taro Pharmaceuticals, which is locked in a battle with Mumbai-based Sun Pharma over control of the company, has said it is still not ‘satisfied’ with Taro’s publishing an audited version of its financial statements for the calendar year 2006 and restating financials for 2004 and 2005.
Templeton Asset Management chairman Mark Mobius told FE that his firm “will not be satisfied until we see all the audited financial statements for all years,” buttressing Sun Pharma’s earlier concerns about Taro’s true financial status.
Indications are also that Templeton will continue to back Sun Pharma in its takeover bid for the Israeli company.
Templeton Asset Management holds 10% stake in Taro.
Late last month, Taro came up with the audited financials, which had long been a concern for investors like Templeton, and restated the number of two earlier years.
Taro Pharma has been trying to ward off a takeover bid by the Indian company ever since the proposed $454-million merger deal was called off in 2008. Both companies have sued each other in Tel Aviv and New York, and are awaiting a verdict on the matter.
Templeton had been of the view that Sun Pharma take control of Taro so that investors get more clarity regarding the financials of the Israeli firm.
Asked whether there will be change in Templeton’s stance in the light of the declarations by Taro and the better operating performance in the audited financial statement for 2006, Mobius said, “We keep an open mind with the objective of realising the best value for our investment.”
The Haifa, Israel-based firm has made the restatements are for the years 2003 to 2005, while it has given the audited financials for 2006.
It had earlier reported sales of $184 million (Rs 833.5 crore) and a net loss of $141 million for 2006. The audited figures, however, show an upward revision in sales to $252 million, and lower net loss at $83 million.
Asked if shareholders needed to receive better value than what Sun had earlier offered, going by the better Taro numbers, Mobius said: “It’s too early to tell until we see what is in the 2007, 2008 and 2009 numbers.” The numbers will probably not have a bearing on the Tel Aviv Supreme Court ruling on the case, he said.
Regarding the possibility of a rejig of the Taro board, Mobius said, “We were not successful last time, and it is difficult to imagine that there would be a change, but we certainly will try.”
Towards the close of 2009, 78% of the minority shareholders of the Israeli company voted decisively against the re-election of Taro’s existing board at the company’s annual general meeting held in Tel Aviv.