New Management For Ranbaxy

After reporting huge losses stemming from its recently acquired Indian subsidiary, Ranbaxy Laboratories, the Japanese pharmaceutical maker Daiichi Sankyo has appointed new managers to head the unit.

Malvinder Singh, the grandson of Ranbaxy founder Bhai Mohan Singh, has stepped down as the company's chairman, CEO, and managing director. Daiichi appointed Atul Sobti, currently Ranbaxy's chief operating officer, to become CEO and managing director. Ranbaxy board member Tsutomu Une will be the company's chairman.

Since Daiichi acquired two-thirds of Ranbaxy's shares from the Singh family last summer, the Indian firm has been beset with problems. Last month, Ranbaxy recalled all its nitrofurantoin antibiotic capsules sold in the U.S. after discovering that the product did not meet specifications. Also last month, Ranbaxy failed to meet a deadline for delivering the active ingredients in the AstraZeneca drug Nexium, according to India's Economic Times.

FDA has banned about 30 Ranbaxy products from the U.S. because one of the company's plants in India did not comply with current Good Manufacturing Practices. In its latest fiscal year, Daiichi recorded a special loss of $3.6 billion reflecting the drop in value of Ranbaxy's shares.

According to Daiichi's CEO, Takashi Shoda, the changes provide "continuity at the senior management level." Une is responsible for global corporate strategy at Daiichi. Earlier in his career, Sobti was a senior manager at a Honda joint venture in India and thus is familiar with the management style of Japanese companies.

At a press conference in Mumbai, Singh claimed he was not forced out.