beyondbrics

Some top executives enjoy enormous longevity at the helm of Indian companies. That can’t be said these days of those at Ranbaxy Laboratories, a once family-owned pharmaceutical company that was bought by Japan’s Daiichi Sankyo two years ago.

Since the Japanese took control of India’s largest generic drugs producer, the company will have had three chief executives in little more than two years. That’s not a good sign.

First, Malvinder Singh (pictured here), the former family owner, quit. Now his replacement, Atul Sobti, has done the same.
Singh had made a commitment to hang around until 2013. But he was always regarded as a transitional chief executive once he had landed what was considered in India as one of the ‘steals’ of the global financial crisis. The sale price was agreed before the company ran into regulatory difficulties in the US and the shareprice tumbled. It did not take him long to want to pursue new avenues in healthcare and financial services.

Sobti, though no dyed-in-the-wool pharma expert, was expected to stay around a little longer. Yesterday, he was not saying too much about why he was going or where. A man who has enjoyed a career in many different sectors, including the automotive and IT industries, he sufficed to say that he was pursuing a new opportunity outside pharmaceuticals.

On his departure, Sobti, who joined Ranbaxy five years ago, praised his own tenure for having delivered five quarters of “excellent performance”. Indeed, with a tighter focus on costs, he helped bring Ranbaxy out of losses. He did, however, acknowledge that the company had “one big challenge” and that was persuading the US Food and Drug Administration to reopen the US market to Ranbaxy’s imported drugs after closing it in 2008.Had Sobti achieved that himself, he might have still been in the job.

The CEO slot is now vacant and the challenge, alongside reversing a sliding shareprice, falls to newly appointed managing director Arun Sawhney and whoever takes the helm as CEO. Sawhney, part of a new intake at Ranbaxy, was formerly head of Ranbaxy’s global operations and a pharma industry veteran with employment at Max, Hindustan Ciba-Geigy and Bayer India.

If, like his predecessors, Sawhney and Ranbaxy’s new CEO choose not to stay the distance, Takashi Shoda, Daiichi Sankyo’s chief executive, may be persuaded to take more direct control and appoint an outsider, or even a Japanese executive.

Failure to get back into the US and a fourth chief executive would give more reason to believe that what was once held as a trailblazer of India’s industrial globalisation was finding it difficult to keep a head of steam.