The Pune District Court of the Judicial Magistrate (First Class) has admitted the criminal compliant filed by Hindustan Antibiotics against five directors of its joint venture company Hindustan Max GB (HMGB). The court has also sent notices to the defendants to appear before the Court by June 3, 2004.

HAL in its complaint has accused 5 persons, who were the directors of HMGB nominated by Max GB Ltd (now renamed as DSM Anti-Infectives India Ltd.) (DAI India), the joint venture partner. The defendants including 3 persons from Netherlands, and the general manager (finance) and company secretary of HMGB, have been listed in the petition as responsible for the illegal acts such as criminal conspiracy, criminal breach of trust, cheating and theft.

The Hon'ble Judicial Magistrate (First Class), Pimpri, Pune after hearing the arguments of HAL's Counsel accepted the submission made by HAL that a prima facie case for cheating, criminal conspiracy, criminal breach of trust and theft has been made out against them and a process has been issued against them for the aforesaid offence. Accordingly, they are required to appear before the Court by June 3, 2004.

It may be recalled that in December 2003 HMGB management, which is allegedly controlled by the officials seconded by DAI India, had suspended the operations of the joint venture company without the consent of HAL nominated directors.

In the complaint filed by HAL, it has alleged that visualising the bleak future of HMGB, due to steep competition from import of Penicillin G mainly from China, a conspiracy was hatched by DAI India's officials for closure of HMGB's operations at the cost of HAL's interest. Accordingly, all the Directors on the Board of HMGB resigned on October 16, 2003 and the Board of Directors of HMGB was paralysed as no business could be transacted by the Board unless one of the nominees of DAI India was present at the Board Meeting. Penicillin Fermentors were closed one by one and ultimately the entire plant was shut down. The Penicillin G (145 mmu) manufactured in the month of Nov./Dec.2003 value of which is more than Rs.5 crores was shifted to Zirakpur, Chandigarh near to DAI India's Semi synthetic plant without even paying for the utilities and services availed from HAL for manufacturing the same in clear violation of the Utilities and Services Agreement between HAL and HMGB.

HAL has also mentioned in the complaint that the aforesaid action of HMGB's management at the behest of DAI India was a big body blow to HAL, which is already referred to BIFR as a Sick Industrial Company.

In fact the Pune Court, after considering a civil petition filed by HAL for illegally shifting the finished product to the DAI India's premises, had issued an immediate stock release order to DAI India. However, the HAL sources informed that DAI has not yet responded to the order.

However, when contacted the spokesperson for DAI said that there is no suit of this nature against the company in any court. At the same time, he added that a Pune court has passed certain orders without serving any notice on HMGB on the basis of certain facts represented in the court. We understand that HMGB has moved the court for vacation of these orders and the court is seized of HMGB's applications, which are yet to be decided.