Sun Pharma gets support of Templeton against Taro

Sun Pharma has got a shot in the arm in its ongoing takeover battle with Israeli drug firm Taro as investor firm Templeton has announced its intention to vote against the Taro board in upcoming annual general meeting later this month.

"The current board and the management of the company have proven unwilling or unable to run the company in the interest of its shareholders; and in our view, they do not deserve the support of Taro's shareholders," Templeton Asset Management Executive Chairman Mark Mobius said in a statement. Templeton Asset Management has around 10 per cent stake in Taro. The firm recently withdrew appeal against Sun Pharma.

Mobius also asked (Taro) shareholders to block the proposed indemnification requested by Taro's chairman and to demand disclosure of audit financial accounts.

Taro's AGM is scheduled for December 31, 2009, in which the existing management of the company has sought the approval of shareholders in passing certain resolutions which protects the directors from possible indemnification.

An indemnification resolution gives undertaking by the company to shareholders to compensate for any possible damage.

Sun Pharma, the largest stakeholder in Taro, today asked Taro shareholders to vote against the re-election of existing directors in the upcoming AGM. Sun and Taro are locked in a legal battle both in Israel and the US over the unilateral termination of proposed merger deal, signed in 2007, by Taro.