RANBAXY & PHARMACEUTICAL REGULATIONS

Brief history:
 Started by Ranbir Singh and Gurbax Singh in 1937.
 Their cousin Bhai Mohan Singh bought the
company in 1952.
 Publicly listed in 1973.
 Entered US market in ’98, other major markets
such as Brazil, Russia, China and Europe.

Bhai Mohan Singh

Famous drugs/products of Ranbaxy:
Previous Ranbaxy manufacturing plants in India
(currently under Sun Pharma post its acquisition of
Ranbaxy in March 2015):

1. Mohali, Punjab (2 plants) 6. Jejuri, Maharashtra

2. Paonta Sahib, HP (2 plants) 7. Ponda, Goa
3. Toansa, Punjab 8. Ghirongi, MP
4. Dewas, MP 9. Baddi, HP
5. Okhla, Delhi
 CHAIN OF EVENTS:
RANBAXY CRISIS

WHISTLE-BLOWERS:
 In 2004-05, Dinesh Thakur blew the whistle on
Ranbaxy’s fabrication of drug test reports.

DINESH THAKUR

PHARMA-REGULATORY ISSUES

 In 2008, Ranbaxy Laboratories Ltd. was issued 2

warning letters by US-FDA and an import alert on
the Dewas and Paonta Sahib plants.
 Later in 2008, the US-FDA banned all products
manufactured in Toansa and Paonta Sahib plants

 Feb 2012: 3 batches of Pantoprazole recalled from

Netherlands due to presence of impurities.

 Nov 2012: Production halted and 41 lots of

Atorvastatin recalled due to glass particles being
found in some bottles.

 In May 2013, company pleaded guilty to felony

charges related to drug and safety and agreed to
pay US $500 million in civil and criminal fines
under the settlement agreement with the US
Department of Justice.

 In September 2013, further problems were

reported, including apparent human hair in a
tablet, oil spots on other tablets, and failure to
instruct employees to wash their hands after using
the toilet.

 Due to the above reasons, the Mohali plants were

prohibited from manufacturing US-FDA regulated
drugs until the company complies with US Drug
manufacturing requirements.
 In Jan 2014, US-FDA in one of its inspection found
irregularities in the data from the Toansa plant.

 US-FDA remark on Toansa Plant : “Our inspection

of the quality control analytical and microbiology
laboratories found the facility to be in significant
disrepair.”
 FINANCIAL FRAUD AT RANBAXY AND
SIPHONING OF FUNDS FROM RELATED
COMPANIES:
SEQUENCE OF EVENTS

1. JUNE 2008:

Malvinder Singh (Left, then CEO of Ranbaxy Laboratories Ltd) and Takashi Shoda (Right,
then President and CEO of Daiichi Sankyo) during the announcement of Ranbaxy Daiichi
deal in 2008.

Singh Brothers (Malvinder and Shivinder) sold

Ranbaxy Laboratories Ltd. – at that time India’s
largest drugmaker to Japanese drug company Daiichi
Sankyo for $ 4.6 Billion
Just few months later, US-FDA starts their
inspections at Dewas and Paonta Sahib plants.
2. 2009-2012:
Nearly ₹ 2700 Crore from the Ranbaxy proceeds are
routed to entities owned by Gurinder Singh Dhillon’s
family (distant relative of Singh Brothers) and
companies associated with Radha Soami Satsang
Beas (RSSB) over three years.
Dhillon, is RSSB’s Spiritual Guru.
From the 2700 Crore, 2000 Crore is invested in 2
firms Prius Real Estate and Prius Commercial
Projects.
Separately, Rs 1,750 crore is invested in Religare
Enterprises (REL) and about Rs 2,230 crore in Fortis
Healthcare Ltd. (FHL) - again from the Ranbaxy
proceeds.
Money transferred to Dhillon and his associates,
estimated to be between 4000-6000 crore
(*different sources have stated different figures)
with interest, remains unpaid to the Singh Brothers.
Rapid and reckless expansion of Religare Enterprises
Ltd and Fortis followed by economic slowdown in
2009 triggers a cycle of debt trap for the Singh
brothers.
This is the beginning of a vicious cycle of mortgaging
assets and equity in group companies to raise loans
and to re-pay previous liabilities.

In November 2012, Daiichi files a case against the

Singh Brothers at the Singapore International
Arbitration Centre for Fraud, alleging that the duo
concealed and misrepresented critical information
relating to the FDA investigations while the deal was
being negotiated.

3. November 2016:
Singh Brothers, Promoters of Religare Enterprises
who hadn’t been on board since April 2010, return
after subsidiary Religare Finvest writes off ₹ 794
crore due to non-reciept of dues from Strategic
Credit Capital associated with ABG Shipyard.

4. November 2017
New York based investor Siguler Guff and Co,
boasting a 6% stake in Religare Finvest, moves to
Delhi HC alleging that the brothers indulged in
“diversion and siphoning of funds” to clear their
personal debts of at least $1.3 Billion.
The lawsuit cites an RBI Inquiry into REL’s 2016 fiscal
books revealing that siblings gave 21 loans worth
millions to independent companies that re-routed at
least $300 million to private firms linked to them on
the same day.

5. January-February 2018:
In January ’18, Delhi HC upholds decision by
Singapore Arbitration tribunal.
The following month, Singh Brothers resign from
Fortis Healthcare’s (FHL) board, following the Delhi
HC order. Later they exit the REL board also.
FHL initiates an independent investigation through
an external legal firm, Luthra & Luthra, following
allegations of siphoning of ₹ 500 crore of funds to
certain corporate bodies

6. December 2018:
Religare Finvest lodges criminal complaint with
Economic Offences Wing of Delhi Police against
Singh brothers. The complaint also names former
REL Chief MD Sunil Godhwani, among other directors
for cheating, fraud and misappropriation of funds to
the tune of ₹740 crores.
7. February 2019:
FHL Chairman Ravi Rajagopal asks SEBI to order an
arrest of Singh brothers for non-compliance with its
interim order.
Two months ago, the regulatory board had directed
the company to take necessary steps to recover ₹403
Crore from the Singh brothers, diverted for the
ultimate benefit of parent company, RHC Holding
and Religare Finvest.

8. March 2019:
On March 15th, SEBI orders Religare Finvest and
Parent REL to recall loans worth over ₹ 2315 crore
that were diverted to the Singh brothers. Within a
week, SEBI confirms its interim order directing FHL to
recover ₹ 403 Crore.
Later in March, Economic Offences Wing of Delhi
Police books Singh brothers on charges of cheating,
criminal conspiracy and breach of trust.
FIR was filed on complaint of Religare Finvest, which
already filed for bankruptcy proceedings.
PROCESS OF APPROVAL OF DRUG FOR
US-FDA APPROVAL

Discovery and Development

Preclinical Research

Clinical Research

FDA Drug Review

FDA Post Market Drug Safety Monitoring

 HOW WAS THE FRAUD REGARDING
RANBAXY’S MANUFACTURING
PRACTICES DISCOVERED??

Dinesh Thakur, in June 2003 had relocated to India

from the US to work at Ranbaxy’s Gurgaon R&D
Centre.
Thakur’s primary responsibilities included Ranbaxy’s
product and portfolio, set up the firm’s program
management office, which looked into generation of
internal data on formulation and manufacturing of
generic drugs.
The former Ranbaxy executive prepared detailed status
evaluations and revenue projections for each drug in
Ranbaxy's portfolio based on four global regions of
business operations, which included the US market.

He was also in-charge of R&D informatics. Thakur’s job

profile gave him access to critical and sensitive data
and the company’s senior management.

Thakur had informed his senior Dr Rajinder Kumar

(then head of R&D of Ranbaxy) regarding falsifying of
data from its drug facilities.
Around August 2004, with the backing of his senior Dr
Rajinder Kumar, started an internal investigation and
audited Ranbaxy’s HIV Anti-retroviral drug and other
drug portfolios to check for falsification of data by
contract research organizations.

The probe according to Thakur, revealed that “there

was little or no underlying data, or to the extent the
data existed at all, defendants had fabricated with the
knowledge, approval and at the direction of senior
management.”

In September 2004 and December 2004, Dr Rajinder

Kumar had informed Ranbaxy’s Board members about
Dinesh Thakur’s findings.
Dinesh Thakur had claimed in an interview with CBS
News channel that Dr Rajinder Kumar was ordered to
destroy evidence and data regarding the tests of drugs.
With Senior Management and Board Members not
taking any measures to stop the manufacturing
practices at Ranbaxy, Dr Rajinder Kumar quit Ranbaxy
in March 2005. A month later, Dinesh Thakur also quit
Ranbaxy.
 SAFETY AUDIT REPORT

Sr Audit Evidence/ Issue Recommendatio

N Findings Document Intensity n
o referred [scale of 1
(minor) to
5 (severe)]
1 Unauthorized CCTV footage of IT 3.5 Protection of files
IT Access department. using Password
and regular
changing of
password on a
monthly basis.
2 Severe US-FDA reports of 5 Management
violation of previous years and callousness has
Good recurring US-FDA been observed in
Manufacturin inspections at this regard.
g Practices Ranbaxy plants. Overhauling of
(GMPs) Violations were also Management a
observed at Mohali better step to
plant during physical ensure better
inspection compliance to US-
FDA regulations.
3 Testing Physical inspection of 4.5 Corroded testing
equipment equipment in R&D equipment can
found departments at cause
corroded several contamination of
plants. Drug. Such
equipment to be
replaced
immediately.
4 Late response During the mock drill, 3 Installation of Fire
of Employees it was observed that Alarms within a
in Block D fire alarm was audible 100 metre radius
and Block E at a very low volume of the concerned
during mock from Block D & E. blocks.
fire drill.