Minority shareholders of Hyderabad-based Zenotech Laboratories [Get Quote], a biotech company in which Ranbaxy [Get Quote] owns 46.8 per cent, are up in arms against Ranbaxy's new owner Daiichi Sankyo for allegedly failing to buy additional shares at the price offered by the former promoters of Ranbaxy.

The minority shareholders account for 25.76 per cent of Zenotech's shareholding, according to data from the Bombay Stock Exchange website. Zenotech specialises in developing rare cancer drugs.

A Daiichi press release said the company has received board approval for the open offer and will pay Rs 113.63 per share to acquire the additional stake. Zenotech management alleged that the offer was lower than that of the Rs 160 offer made in October 2007, through which Ranbaxy raised its stake to about 46.8 per cent.

Ranbaxy, had initially acquired 7 per cent in Zenotech by paying close to Rs 20 crore. It then bought an additional stake, comprising promoters shares and preferential allotment, by paying Rs 214 crore, which increased its stake to a little less than 45 per cent. The additional purchase triggered an open offer at Rs 160 a share. But Ranbaxy could buy only 2.2 per cent in the offer, increasing its stake to 46.8 per cent.

In a quick response, Zenotech called upon the Daiichi management to revise the share price to Rs 160. Zenotech Managing Director Jayaram Chigurupati said Daiichi agreed to pay Rs 160 per share way back in July, 2008.

"Two law suits filed by Zenotech shareholders in the Andhra Pradesh High Court seeking to stay the Daiichi-Zenotech deal were withdrawn on the basis of this agreement. However, On January 15, Daiichi unilaterally went back on its commitment," Chigurupati said.

According to Chigurupati, Daiichi should have announced an open offer along with the open offer it made to acquire Ranbaxy shares. "Under Indian rules, Daiichi has already defaulted and could invite penalties up to Rs 100 crore by not announcing the open offer within the stipulated six month period," he said.

Zenotech shareholders are in the process of writing to the Daiichi board and also making representations to Securities and Exchange Board of India and Foreign Investment Promotion Board on the matter.

Zenotech's share price fell 12 per cent on the Bombay Stock Exchange.