The SFO said its investigation against Ranbaxy and four other British companies into price fixing and market sharing by suppliers of generic drugs, like warfarin and penicillin-based antibiotics, has led to criminal proceedings.

The UK government’s health service has claimed that it lost more than pound 150 million on the purchase of the drugs from these companies. “This important case involving an allegation of dishonest price fixing by companies is likely to have a significant impact upon the business culture of this country,” said SFO’s Philip Lewis.

The SFO has begun criminal proceedings against nine individuals and five companies alleging conspiracy to defraud the British government between January 1996 and December 2000. The nine individuals who will be charged when they surrender their bail in the next three days includes former Ranbaxy employee, Anil Kumar Sharma.

The SFO said summons issued by Bow Street Magistrates on April 3 was served today on Kent Pharmaceuticals, Norton Healthcare and Goldshield Group PLC besides Ranbaxy UK. “The individuals will be bailed following charge to attend Bow Street Magistrates Court on April 27 when the companies are also required to be represented,” the SFO said.

Reacting to the SFO’s announcement, Ranbaxy Laboratories said: “RUKL has not yet been informed of the substance of the allegation against it nor the evidence upon which they are based and is therefore not in a position to comment. The company is not aware of any wrongdoing.”

The charges follow a four-year investigation by the serious fraud office. The maximum prison sentence for conspiracy to defraud is seven years and companies can face multi-million pounds as fines. Evidence, including boardroom meetings, shows that the companies agreed to fix the prices and divide the profits has been provided by 16 company insiders. Some of the company executives agreed to co-operate with the prosecution under a novel witness accomplice programme, the first such strategy in a large-scale fraud investigation.

Incidentally, two firms including Ranbaxy and Generics UK announced in June last year that it had agreed to compensate the NHS by paying pound 12 million and pound 4.5 million respectively, without admission of liability. Both had agreed to co-operate with the proceedings. BITTER PILL

• THE CHARGE: The company was part of a scheme to ramp up the price of penicillin and the blood-thinning drug warfarin

• WHAT THE UK SAYS: It lost more than 150 million pounds on the purchase of the drugs from 5 companies

• WHAT LIES AHEAD: Nine individuals who will be charged when they surrender their bail in the next three days include former Ranbaxy employee Anil Kumar Sharma