The prime promoter of Ranbaxy Laboratories Ltd, Parvinder Singh, has given up the chief executive's position making way for D.S. Brar, president of this drug major with an annual sales turnover of over Rs 1,400 crore.

While Parvinder Singh would continue as the chairman at Ranbaxy, Brar will be the new managing director of the company from October 1, 1999. With this, all speculation about succession at Ranbaxy were put to rest. A resolution on appointing successor to Parvinder Singh was adopted at a meeting of the Ranbaxy board of directors which met today at Mohali near Chandigarh. Brar, who has been hitherto the president of Ranbaxy, has been designated as the chief executive officer (CEO) and managing director.

Apart from appointment of a new CEO, the Ranbaxy board has also approved a code of practices to institutionalize corporate governance in the company. This has been done apparently to strengthen the management at the highest level and to make the decision making process more transparent and effective, a Ranbaxy news release said.

Accordingly, three committees have been constituted to look into issues regarding management, science, finance and audit with the majority of members being nonexecutive directors. The new code envisages a maximum of two terms of three years each for these directors. In exceptional cases, the code has been made flexible for giving a third term. However, the Ranbaxy leadership has set an upper age limit for retirement at 70 years for the directors.

While stepping down as the managing director, Parvinder Singh expressed full confidence in Brar's capabilities and leadership qualities in providing the company with direction in its next phase of growth. With Parvinder Singh at the helm of affairs during the last 17 years, Ranbaxy achieved a sales turnover last year of Rs 1,400 crore from a meagre Rs 36 crore. The market capitalization of Ranbaxy rose during the period from Rs 3.5 crore to over Rs 7,300 crore.

Under Parvinder Singh's leadership serious efforts seem to have been made for turning Ranbaxy into a research based pharmaceuticals company with business extending from branded, generic and bulk drugs to intermediates.

With continued emphasis on research and development of new drug molecules, Ranbaxy has entered into a string of joint ventures.