Cipla Medpro South Africa Ltd. (CMP), the country’s third-largest drugmaker, said it is opposing a lawsuit from former Chief Executive Officer Jerome Smith which alleges his employment contract was ended unlawfully.
Smith claims about 18 million rand ($2.1 million) for the repudiation of his fixed-term contract and more than 11 million rand for unpaid bonuses, the company said in a regulatory filing after the close of the Johannesburg Stock Exchange.
Cipla “will oppose the proceedings” in the Labour Court, the company said.
Smith, who was CEO of the Johannesburg-based company for almost five years, resigned on Oct. 8 before the start of a disciplinary meeting into more than 20 charges, including gross misconduct. The Takeover Regulation Panel probed the company after shareholders, including Smith, lodged a complaint. The regulator dropped its investigation, Cipla said today.
The company’s stock has risen 26 percent since Smith’s resignation and closed at 9 rand in Johannesburg. The four- company FTSE/JSE Africa Pharmaceuticals and Biotechnology Index advanced 17 percent over the same period.
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