Healthcare chief in SFO probe mulls buyout

Click to follow
The Independent Online

The healthcare group Goldshield, which is at the centre of price-fixing allegations, confirmed yesterday it was in early-stage talks over a possible management buyout.

The group said its chief executive Ajit Patel had made a preliminary approach but added there could be no certainty that an offer would be made. The shares jumped 14 per cent to 337p as investors welcomed the move.

In April, Goldshield and four other companies were charged in relation to a multi-million-pound price-fixing fraud against the National Health Service. This followed a four-year investigation by the Serious Fraud Squad.

Mr Patel and the chief operating officer, Kirti Patel, were also charged. Goldshield has always denied that the company and its two directors had acted illegally or improperly.

The allegations, dating from 1996 to 2000, relate to the pricing and supply of penicillin-based antibiotics and warfarin, a blood-thinning drug used to treat stroke victims.

Goldshield, which is valued at about £120m, sells prescription and non-prescription medicines, vitamins, minerals and supplements and other healthcare products. It is moving away from generic drugs to concentrate on its Wellbeing Clinics Project in India. The first Wellbeing centre is opening in Mumbai and will offer recuperation facilities for tourists who go to India for operations.

The group, being advised by Panmure Gordon over the possible buyout, is due to publish its interim results tomorrow. Analysts recently downgraded forecasts and are expecting full-year pre-tax profits of £15.5m compared to £6.8m last year. The company's legal bill to fight the fraud allegations hit £1.6m in 2005.

The other companies linked to the allegations were Kent Pharmaceuticals, Norton Healthcare, Generics and Ranbaxy.

Earlier this year, Keith Hellawell, the former chief constable and government drugs tsar, replaced Peter Brown as non-executive chair at the group.

Comments