Torrent Pharma says charges of duping C&F agents baseless

Torrent Pharma-Elder portfolio acquisition | Year: December 2013 | Deal size: USD 323 million Objective: To expand India portfolio and scale up sub-optimal products. Result: Elder's portfolio acquisition turned out to be highly profitable for Torrent, with 23 percent CAGR of Elder’s brands over FY14-17. Torrent, the 12th largest (in terms of IMS sales) pharma players in India increased its market share from 2.0% to 2.7% in the country. (Image: Reuters)

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Drug maker Torrent Pharma on October 3 called the allegations of collusion with Elder Pharmaceuticals to dupe certain carry and forwarding (C&F) agents of Rs 45 crore as “baseless and malicious.”

The company spokesperson said Torrent Pharma is not liable to pay outstanding dues to C&F agents for the period before June 29, 2014, as per the business transfer agreement.

It is Elder Pharma's responsibility to settle those dues, the spokesperson added.

The spokesperson said the C&F agents had also initiated arbitration proceedings against Elder in Mumbai high court. The liability of Elder towards the outstanding dues of the C&F agents is not disputed and Torrent isn’t even impleaded in those cases.

“Why would a company of Torrent size put its reputation at stake for dues worth Rs 45 crore, the allegations made in the said report are baseless,” the spokesperson further said.

Tehelka earlier reported that Torrent in connivance with Elder Pharma, a company currently into liquidation, indulged into a multi-crore economic fraud defrauding many operational and other creditors including 17 Clearing and Forwarding (C&F) agents of their legitimate dues.

Torrent bought branded domestic formulations business of Elder in India and Nepal for Rs 2,004 crore in 2013. The acquisition turned out to be a success as Torrent got top selling Shelcal (calcium and vitamin D3 combination), besides 30 others in segments including women’s healthcare, pain management, wound-care and nutraceuticals.

Elder got into a debt trap with loans of around Rs 1,300 crore and was making losses. However, even after the sale of formulation business to Torrent, Elder never really recovered. The company defaulted on repayments of fixed deposits, NCDs and other creditors and is facing liquidation.