Legal documents fly to and from Rhodia

- Last updated on GMT

Related tags: Rhodia, Sanofi-aventis

French chemicals company Rhodia, already facing two separate
investigations for alleged accounting irregularities and insider
trading, has become embroiled in further legal fights just as it
starts to lift itself out of financial difficulties.

On one hand, the embattled company is facing class action lawsuits from investors in the US, alleging that the company violated securities laws by overstating its financial results and failing to divulge the problems at its ChiRex unit, which is in the throes of a major restructuring exercise.

The class action lawsuits follow two probes into Rhodia for accounting irregularities and insider trading by the French authorities relating to a period between 2001 and 2003 when the company was led by former CEO Jean-Pierre Tirouflet. At least one of these actions stems from complaints filed in 2003 by Edouard Stern, the banker and former Rhodia board member who was found dead in his Geneva apartment in March.

On the other hand, Rhodia is facing aggressive proposals from dissatisfied shareholders at its annual general meeting next month seeking to oust the firm's top directors.

Two proposed resolutions are seeking to dislodge board members Yves-René Nanot, the company's chairman, and Hubertus Sulkowski, formerly head of Rhodia's risk committee. The proposals also call on shareholders to not renew the contract of Rhodia's current CEO, Jean-Pierre Clamadieu, despite the recovery in the firm's finances that have resulted from his sweeping restructuring efforts and asset disposals.

Under his tenure, Rhodia saw 2004 sales dip slightly to $6.57bn, but the firm's net loss was cut by more than 50 per cent to $777m while its debt was slashed by a quarter to $2.34bn at the end of the year. Analysts cited by Dow Jones are predicting that Rhodia will report operating earnings up 15 per cent to €142m in its first-quarter results statement tomorrow.

Files suit against Sanofi-Aventis

Separately, Rhodia is claiming €570m or more in compensation in a dispute with its main shareholder, pharmaceutical company Sanofi-Aventis, in a complaint filed with the US Securities and Exchanges Commission. The action includes a claim of €125m for environmental liabilities and another €445 million to cover retirement costs.

Rhodia was spun off as a separate chemicals entity by France's Rhone-Poulenc when it merged with German company Hoechst to form Aventis. Last year, Aventis hooked up with Sanofi-Synthelabo to form the new company.

Related news

Show more

Related product

The Effect of Tamping Force on Bi-Layer Tablets

The Effect of Tamping Force on Bi-Layer Tablets

JRS PHARMA | 15-Aug-2020 | Technical / White Paper

Formulation of bi-layer or multi-layer tablets enables the combination of two or more drugs that may be incompatible or maybe intended for delivery at...

Related suppliers

Follow us

Products

View more

Webinars