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The Singh family has inched closer to once again occupying the corner office at Ranbaxy Laboratories Ltd, India's largest pharmaceutical company.
Devinder Singh Brar, the CEO and managing director of the company, on Monday announced that he would step down in July 2004, even as Malvinder Mohan Singh, the elder son of the late Parvinder Singh, was co-opted on the board and made second in command of the company.
At a meeting of the Ranbaxy board of directors, Brar said he would not seek a renewal when his current term as CEO and managing director expires on July 4, 2004.
"Having fulfilled my role in the company, I would like to devote my time to other pursuits in the next 10-15 years of my working life," Brar told reporters later in the day indicating that his new venture might have something to do with pharmaceuticals.
When asked if he would step down from the company's board as well, Brar said he would decide on it over the next few months.
Brian W Tempest, who was promoted from president (pharmaceuticals) to joint managing director and CEO-designate on Monday, will take over from Brar in July. In his place, Malvinder has been appointed president (pharmaceuticals).
Tempest, who had joined the company in 1995, is 56 years old and could retire within two years of taking over from Brar as the retirement age at Ranbaxy is 58 years, unless he gets an extension.
The Ranbaxy share price fell by Rs 5.05 to close at Rs 1119.25 at the Bombay Stock Exchange.
Pharma sector analysts feel that Ranbaxy has its system in place and an individual's exit will not greatly affect the pharma major. "There could be some small hiccups and the same thing happened when Parvindar Singh died," said a senior analyst.
Shahina Mukadam of HDFC Securities said: "Ranbaxy is a professional organisation and it has enough strength to withstand any shock. Brar's exit will be a marginal setback."
Ranbaxy chairman Tejinder Khanna told Business Standard the resignation did not come as a surprise as Brar had apprised the board of his decision.
Parvinder Singh had resolutely blocked all demands to induct his sons, Malvinder and Shivinder, insisting that his sons would have to find a place on the board on merit.
When asked if Malvinder had done enough to deserve a seat on the Ranbaxy board, Brar said he had gained rich experience in the last few years having worked in various divisions of the company.
It was in 1997 that Brar had first said that he would retire in 2002, when he would have turned 50 and completed 25 years with Ranbaxy.
Soon afterwards, Parvinder Singh was diagnosed with cancer and he died in July 1999. Brar had agreed to take over the baton from him for a period of five years.
"I have achieved what we wanted to achieve. We will achieve a turnover of almost $960 million in 2003. Once the 55 million euros turnover of RPG Aventis of France, which we have acquired, is added, our turnover will cross $1 billion," Brar said.
Earlier in the year, Brar had unveiled the Garuda vision for the company, which talks about a turnover of $5 billion by 2013, with 40 per cent of the turnover coming from Ranbaxy's proprietary products.
"There is sufficient width and depth in our management team," Brar said when asked how the company would perform after him.
Family moves centrestage
Ranbaxy under Brar