Hindustan Antibiotics Mazdur Sangh (HAMS) and the Hindustan Antibiotics Officers Association (HAOA), the only two staff associations in the public sector pharmaceutical company Hindustan Antibiotics Limited, said that they objected to the Sun Pharma's take over proposal as it seemed offensively low.

The association sources pointed out that the proposal submitted by Sun Pharmaceuticals is not for rehabilitation of the BIFR referred company but for taking over its assets, valued over Rs.750 crore, free of cost as could be seen from the details of the offer submitted to IDBI. The unions alleged, "the proposal seems to be an outcome of corporate-government nexus to hand over public corporate assets to private companies for a song by accepting favours".

As per the take over proposal, Sun Pharma would bring Rs.67.71 crore in settlement of the liabilities of Hindustan Antibiotics, arising out of termination of its entire employees and the existing debts, while they would generate Rs.76 crore in cash by sale of just 10 per cent of the HAL assets and also through the anticipated tax benefits. In effect, if the deal comes through the government would be transferring the PSU's assets worth Rs.772.86 crore along with a benefit of Rs.9.29 crore to Sun Pharmaceuticals. The company has also asked for a number of subsidies and concessions from the government in the said scheme.

The associations also felt that on sanction of the scheme, all the employees of HAL stand terminated and all the liabilities including sundry creditors, overdraft facilities would be settled with substantial concessions and the lease/joint venture agreements with Hindustan Max GB and RPG Lifescience stand terminated. All the employees have to vacate their quarters to enable the taker to get the land free from all encumbrances, which would lead to closure of the company through BIFR route, but not actually a revival.

In addition to this, the HAL sources said, most of the terms and conditions put in the Sun Pharma scheme is illegal and impractical. "So such a proposal is bound to be rejected ab initio" the sources asserted.

It may be recalled that on February 10, the IDBI opened the bids submitted by Sun Pharmaceuticals and the HAL employees union and following the objection raised by the concerned parties, the bank had referred both the proposals to the BIFR without taking any decision.