Vijay Mallya To Step Down As Sanofi India Chairman

Sanofi India, the India listed arm of the French drugmaker Sanofi SA, said on Wednesday (23 March) that its chairman Vijay Mallya has conveyed his decision to not seek re-election as a director on the board of the company at the ensuing annual general meeting (AGM), which is scheduled by end of April.

Mallya conveyed his decision through a video conference to Sanofi board, which met on Wednesday evening.

Following Mallya’s decision to step down from next AGM, Sanofi India has also announced that it intends to appoint Aditya Narayan, former chairman of Akzo Nobel India, as the next chairman of the board, subject to his election as an independent director at the ensuing AGM.

Mallya, who has been the chairman of Sanofi India that was then called as Hoechst Pharmaceuticals Ltd since 1983, however has not mentioned any reason for the decision.

"I have been privileged to preside over the board of this company and to have participated in its phenomenal growth and prosperity over such an extraordinarily long period of time," said Mallya, who has apparently left India in the first week of March skipping debt recovery action by a group of lenders of his grounded airline company.

"Today, Sanofi India is not only financially strong but with an impeccable track record. It is gratifying to me that the company continues to serve needy patients in India with world-class medication whilst ensuring consistent returns to all stakeholders," Mallya added in his message, which was sent on Wednesday late evening to the board of directors of Sanofi India.

Vijay Mallya became a director of Sanofi India 1973 since he and his family inherited his father’s stake holding in the company.

A consortium of 17 banks led by State Bank of India, which has a total loan exposure of about Rs 9,000 crore, including original loan amount of about Rs 5,000 crore and the interest, had declared Mallya as a wilful defaulter early this month after his company Kingfisher Airline defaulted on the loans payable to these banks after the airline suspended operations in 2013 due to mounting losses.

Following the wilful defaulter tag as well as legal charges for non-payment of service tax and other statutory dues on Mallya, the industry watchers had cautioned that his continuation as chairman on the board may be a reputation risk for Sanofi India.

Mallya had last month resigned as a director and chairman of United Spirits Ltd, the country's largest spirits maker, following pressure from its board, currently controlled by British distiller Diageo Plc.

"The board of directors while accepting Dr. Mallya’s decision placed on record its deep appreciation of his exceptional service and leadership, firstly as a director and subsequently as chairman of the board for over four decades," said Sanofi India managing director Shailesh Ayyangar.

Following Mallya’s decision to volunteer his exit as a director on the board from next AGM, the independent directors on Sanofi India board has recommended to the shareholders that resolutions be passed at the ensuing AGM to elect two new independent directors to the board - Aditya Narayan and Usha Thorat, chairperson of Clearing Corporation of India, for a term of five years.