The Central Bureau of Investigation on Friday filed chargesheets against five top executives of pharmaceuticals major Johnson & Johnson, including its managing director, M K Ambwani, for allegedly setting up a small-scale unit to evade central excise.
The executives were chargesheeted in the court of additional chief metropolitan magistrate, Girgaon, Mumbai, under the Essential Commodities Act, 1955. None of the executives has been arrested so far. The next hearing for the case has been set for July 16.
The chargesheets have been filed against Ambwani, the company's pharmaceutical division president and director A V Dangi, executive vice-president and company secretary R R Mallar, general manager (legal) A V Uphadhay and manager (legal) P K Mehta for allegedly indulging in a criminal conspiracy and misleading the government by providing wrong information to get price exemption on some scheduled drugs.
"We are co-operating fully with government agencies on this matter and are confident that we will satisfactorily resolve the issues," a Johnson & Johnson spokesman said.
According to the CBI chargesheet, Johnson & Johnson fraudulently set up and financed through four fully-owned investment companies a small-scale unit by the name of NR Jet Enterprises.
"The scheduled formulations manufactured by NR Jet were, in fact, manufactured by Johnson & Johnson and shown in the name of NR Jet Enterprises. Johnson & Johnson violated the Drugs (Price Control) Order by seeking price exemption on scheduled formulations on the basis of false and misleading declaration," the chargesheet said.
The company was floated because Johnson & Johnson was not entitled to price exemption, the CBI alleged. "The CBI found during investigations that the SSI unit was a 'paper creation' of Johnson & Johnson and was dishonestly created with the motive to unlawfully avail of facilities of being a small-scale unit," the spokesperson said.
The CBI alleged that Johnson & Johnson was the beneficiary and hatched and executed the criminal conspiracy during 1997-2001 through its employees -- Ambvani, Dangi, Mallar, Upadhyay and Mehta -- to avoid and evade central excise and cheat the public at large.
The spokesman said the chargesheet filed by the CBI also alleged that Ambwani, being the managing director, consciously allowed the employees of his company to promote and work for NR Jet.
