SOUTH AFRICA’s third-biggest generic drug company Cipla Medpro (CMP) has remained tight-lipped about the reasons for its suspension of CEO Jerome Smith.
Addressing investment analysts ahead of a presentation of Cipla’s results for the six months to end June on Thursday morning, Cipla chairman Sbu Luthuli said it was "business as usual" pending the outcome of the company’s investigation into Mr Smith.
"I want to assure shareholders the business is in good shape. We have good and competent managers," he said. Regarding the reasons for Mr Smith’s suspension by the board, announced on Wednesday evening after the markets closed, he would say only that it was "a serious issue" and would be dealt with as quickly as possible to ensure the company’s stability.
The matter was not material relative to the size of the company, he said.
Non-executive director Johan du Preez has been appointed acting CEO.
Mr Luthuli said Cipla’s corporate action continued: "We are (still) talking to the parties we (have been) talking to. We have kept them up to speed, and I have personally spoken to them. There is nothing that indicates to me that the corporate action is not moving forward," he said. Cipla issued a cautionary notice to shareholders in May, fuelling speculation that it was either on the acquisition trail or talking to a prospective buyer.
Mr Luthuli also assured shareholders that Cipla Medpro’s 20-year agreement with Cipla India, which enables the South Africa-based company to import Cipla India’s generic drugs, remained in place. "There is no indication that there is any risk attached to the supply agreement — it is legally binding," he said.
"Cipla India is committed to (working with us)," he said.
"Unfortunately there is not much else that I am able to say... Bear with us until we are in a position to share more information," he said.
Cipla reported a 28% increase in revenue to R1.08bn and normalized headline earnings per share rose 31% to 35c. The company also announced an interim dividend of 8.5 cents.
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