Taro Pharmaceutical Industries Ltd. (NYSE: TARO) ("Taro" or the
"Company") announced today that it delivered a letter to one of its
shareholders IsZo Capital Management LP ("IsZo") in response to IsZo's
letter to Taro's Special Committee of the Board of Directors dated
November 5, 2012. The full text of the letter is set forth below:
Re: Taro Rejects IsZo's FY Q2 Under Reporting Allegation as Untrue and
Dear Mr. Sheehy,
We at Taro are very appreciative of our shareholders' communications.
More recently, our ability to respond to certain inquiries has been
limited in light of the pending merger between Taro and Sun Pharma and
the related shareholder meeting scheduled December 6, 2012. Rather, our
management team's primary focus continues to be on Taro's core business,
the performance of which speaks for itself.
Without responding to your many unfounded allegations over the past few
months, I feel compelled to publicly correct one of your most recent
statements. In your November 5th letter and corresponding
press release, you contend that Taro is "gaming its reserves." Your
allegation is simply untrue and your comment is, at a minimum,
irresponsible to your fellow Taro shareholders.
As a NYSE listed company, Taro takes its financial accounting and
reporting obligations very seriously. Although our quarterly financial
reporting is presented on an unaudited basis, the accounting
methodologies used in estimating our reserves are "consistently applied"
quarter to quarter, in conformity with U.S. GAAP. Over the last couple
of years, at the request of our Board and Audit Committee, we have taken
an extra step by having our independent auditors perform certain "agreed
upon procedures" on our financial statements focusing on specific areas,
including reserves, prior to issuing our quarterly releases, including
that for the quarter ended September 30, 2012.
Given your broad industry knowledge, you undoubtedly appreciate that,
while IMS data is useful to the industry for general U.S. market
intelligence and a general understanding of long term, product trends,
it is not reliable (or prepared) for consolidated financial reporting
analysis as you propose.
Finally, I recognize your excitement for Taro as expressed in your
letter. I believe that all Taro shareholders have benefited tremendously
at what the new management team, under the leadership of Mr. Shanghvi
and, subsequently, Mr. Sundaram, have accomplished since the change in
control in September 2010.
/s/ Jim Kedrowski
Interim Chief Executive Officer
Taro Pharmaceutical Industries Ltd. is a multinational, science-based
pharmaceutical company, dedicated to meeting the needs of its customers
through the discovery, development, manufacturing and marketing of the
highest quality healthcare products. For further information on Taro
Pharmaceutical Industries Ltd., please visit the Company's website at www.taro.com.
Taro Pharmaceutical Industries Ltd.
William J. Coote, 914-345-9001