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SpecialReport CORPORATES

Pharma C&F agents charge 2013 and allegedly in the hindsight of Tehelka sent a questionnaire to key persons at Torrent Pharmaceuticals

the said agreement the entire busi -
Limited -Sudhir Mehta, Samir Mehta and Ashok Modi on July 9, 2018 and
Torrent Pharmaceuticals & ness of Elder was transferred to Torrent on July 27, Executive Director, Jayesh Desai sent the following reply:
rendering Elder as barely a shell com-
pany with no assets but huge liabilities.
Mr Ahuja,
The 17 C&F agents were initially C&F
Elder Pharmaceuticals with agents of Elder Pharmaceuticals and July 2018 (copy enclosed for reference).
This has reference to your letter dated 9th July 2018, received by us on 24th
had deposited between 25 lakhs to
one crore each as refundable security
Our reply to your above referred letter is as under.
deposit with the said company and
multi-crore fraud, cheating their respective C & F agreements were formulations in India. It is alleged by these C&F Agents that their commission,
Elder had appointed various C&F Agents for distributing its pharmaceutical
valid upto March 31, 2015.
security deposits, etc. payable under such arrangement with Elder has been
On the date of execution of the Busi-
ness Transfer Agreement with Tor-
rent Pharmaceuticals Limited, each of outstanding and that Elder has failed to pay the same. It is clear in the Busi-
ness Transfer Agreement (BTA) as well as the draft novation deed annexed
said C & F agents had huge admitted to the said BTA that outstanding dues of the C&F Agents would be settled by
“Where every voice is heard” proclaims the website of Torrent Pharmaceuticals Limited, a company money to recover from Elder Pharma Elder and that the liabilities till the closing date i.e. 29th June 2014, will not get
transferred to Torrent. Further, please note that the obligation to obtain nova-
which included dues towards commis-
claiming high repute. However, Carrying and Forwarding agents based in different parts of the sion, expenses interest etc. C&F agents tion of C&F Agent’s agreement was solely that of Elder.
We would like to inform you that the said C&F Agents had also initiated
country allege that what to speak of hearing to their grievances and giving them their legitimate due, allege that during the time of execu- arbitration proceedings against Elder and Hon’ble High Court of Mumbai in
tion of BTA, they (the C&F agents) were
they have been left completely high and dry and made to run from pillar to post to seek recovery of misguided and befooled by the officials the Arbitration Petition No. 864 of 2015 of M/s. Pharma Traders & others had
about 45 crores from pharma major Torrent Pharmaceuticals Limited, writes CHARANJIT AHUJA of Elder Pharma who represented that pronounced a judgment dated October 29, 2015. It is evident from the judge-
upon execution of some Novation Deed ment that the liability of Elder towards the outstanding dues of the C&F Agents
is not even disputed.
t is alleged that Torrent in conniv- It is also evident that neither Elder nor C&F Agents has impleaded Torrent
ance with Elder Pharmaceuticals Pharma as a party to such legal proceedings or have stated that liability of such
Limited, a company currently into outstanding dues is of Torrent Pharma.
liquidation, indulged into a multi- In respect of the Escrow Account referring to the Bombay High Court Order,
I crore economic fraud whereby it was a separate order which was for setting aside amount against claims of
defrauding many operational and specified unsecured creditors and not against all unsecured creditors. The letter
other creditors including 17 Clearing and from Elder therefore to this extent was neither relevant nor in accordance with
Forwarding (C&F) agents of their legiti- the terms of the Escrow Agreement.
mate dues. Further, the material facts which the said C&F Agents are alleging to be
Giving their side of story to Tehelka, misrepresented and concealed before CCI by Torrent Pharma, are a baseless
the 17 C&F agents alleged that the two contention.
companies in a most systematic and From the aforesaid facts, you would appreciate that the allegations raised
organised manner, committed a multi- are only frivolous and baseless in nature.
crore financial fraud whereby Torrent
Pharmaceuticals Limited acquired Regards
almost the entire business of Elder
Pharmaceuticals Limited and ren -
dered the said company as merely a Jayesh Desai
shell company. It is alleged that before Executive Director
the said acquisition took place Torrent
Pharma was aware of the admitted
pending liabilities of Elder Pharma and
with the intent to siphon huge sums of their respective business shall be trans- BTA on December 13, 2013, and con-
money, running into several hundred ferred to Torrent and they shall become cluded the Business transfer on June 29,
crores, both companies connived to C&F agents of Torrent. The terms of 2014 for a total consideration of 2004
defraud several operational creditors of the BTA were never shared with the crores. All this while, the C & F Agents
Elder Pharma. C & F Agents and they believed what- awaited in anticipation of the execution
To carry forward the said fraud both ever was told to them by the officials of of Novation Deed with Torrent Pharma.
companies executed a Business Trans- Elder Pharma. All the 17 C & F Agents were provided
fer Agreement (BTA) on December 13, Both companies entered into the Novation deeds (that was to be executed

TEHELKA / 30 SEPTEMBER 2018 24 WWW.TEHELKA.COM TEHELKA / 30 SEPTEMBER 2018 25 WWW.TEHELKA.COM

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