When Parvinder Singh died in the summer of 1999, his father, Bhai Mohan Singh, was found pleading that his grandsons, Malvinder and Shivinder, be co-opted on the Ranbaxy board without any delay. They were, after all, the principal shareholders of the company.
The brothers, on their part, put out a statement that they believed in their father's philosophy of separating ownership from management and would, therefore, not seek a board representation.
D S Brar, handpicked by Parvinder Singh, thus got a free hand to run India's largest pharmaceutical company. And this is how things stayed for the next five years.
Malvinder worked in various departments of Ranbaxy and Shivinder stayed away from the company to pursue the family's interests in hospitals. Then, things began to move at a fast pace in 2004. Brar left, Malvinder joined the board and became president (pharmaceuticals), while Brian Tempest was appointed CEO and managing director.
But Tempest's tenure was short. Most people knew he was warming the seat for Malvinder. The inevitable happened in January 2006 -- Tempest was made chief mentor and executive vice-chairman, and Malvinder was in the driving seat.
In the middle of 2008, he sold Ranbaxy to Daiichi Sankyo of Japan, though the new owner made him CEO for a five-year term. Then, last month, he resigned after a two-hour board meeting at a five-star hotel in New Delhi. This ended the Singh family's long connection with Ranbaxy.
Tongues started to wag immediately after his exit. Why did Malvinder leave even before the first year of his five-year term got over? Various theories began to do the rounds.
One point that was missed out by all was that his exit has probably helped Daiichi Sankyo send out a strong message to people who matter.
Ranbaxy is under the watch of the United States Food & Drug Administration. It has put a ban on the import of medicine produced at Ranbaxy's Paonta Sahib facility in Himachal Pradesh for falsification of data. This is serious and it could take up to two years to get the ban lifted.
The change in management is probably meant to show that Daiichi Sankyo is dead serious about sorting out the row, never mind the Rs 45 crore (Rs 450 million) severance cheque it had to write for Malvinder. The USFDA charges incidentally relate to the time before Malvinder got control of the company.
So, was Malvinder good or bad for Ranbaxy?
For the first two years, he had a great run. In 2005, the year before he became CEO, Ranbaxy had shown a profit after tax of Rs 223 crore (Rs 2.23 billion). It rose to Rs 380 crore (Rs 3.8 billion) in 2006 and Rs 617 crore (Rs 6.17 billion) in 2007.
Things took a turn for the worse in 2008 when the company reported a loss of Rs 1,044 crore (Rs 10.44 billion). Ranbaxy attributed it to mark-to-market losses on the fair value of derivatives. The company took the wrong call on foreign exchange. The recent appreciation of the rupee against the dollar is expected to help matters.
But the losses did stick out. Daiichi Sankyo recently lowered its guidance for the year, thanks to Ranbaxy of which it now owns over 63 per cent.
A point that may get missed here is that Malvinder brought about some basic changes in Ranbaxy's business model. During Brar's time, it was focused on the US which accounted for almost half of worldwide pharmaceutical sales. So Ranbaxy's target was to get half of its sales from the US.
In the last few years, mature markets like the US have turned adverse for generic drug firms like Ranbaxy. Governments there want to cut their healthcare budgets and the axe has first fallen on generic drugs. Germany has even resorted to online auctions for generic medicine to squeeze the last margin out of generic prices.
To deal with this problem, Malvinder did several acquisitions in emerging markets like East Europe and South Africa where margins on generic drugs are better protected. Now, 64 per cent of Ranbaxy's turnover comes from such countries.
The next thing he worked on was alliances with Big Pharma. Instead of working at cross-purposes, multinational pharmaceutical companies and generic drug makers are now coming together to look at fruitful co-existence.
Malvinder expanded considerably the scope of the research and development tie-up with GlaxoSmithKline, forged a new one with Merck and finally made Ranbaxy a part of Daiichi Sankyo.
Malvinder also settled patent challenges out of court and converted them into quantifiable revenue streams.
The most important was Ranbaxy's challenge to Pfizer's cholesterol-lowering drug and the world's largest-selling medicine, Lipitor. There were at least three others. Ranbaxy could get well over a billion dollars from these settlements in the near future. This also plugged the large sums of money Ranbaxy was paying patent attorneys year after year.
One reform that Malvinder couldn't do was that of the company's board of directors. For long, doctors and scientists have been inadequately represented on the Ranbaxy board. The new owner will have to address this problem.
When he was young, Malvinder's summer vacations were spent on pillion with Ranbaxy representatives on their rounds of chemists and doctors. That chapter has now come to an end.