A few months ago, the South African drugmaker Cipla Medpro said its CEO had been suspended because of "serious allegations" it declined to specify. Now that CEO, Jerome Smith, has stepped down. The reason? "[A]n irretrievable breakdown in the working relationship with the board," the company said in a statement (as quoted by Reuters).
Indeed. Smith himself told iAfrica that the board was "malicious," and that its actions have "rendered the continuation of a meaningful and trusting relationship an impossibility."
Smith's resignation came just before a scheduled disciplinary hearing, at which the ex-CEO was set to face those previously unspecified allegations--which are now, in fact, specified. Cipla Medpro alleges that Smith gave himself bonuses and pay increases that weren't authorized by the board, and that he put 45 people on the payroll who weren't actual employees, Reuters says.
Smith said defending himself would be a waste of money, iAfrica reports. [T]o attempt to continue to serve shareholders under these circumstances presents an intolerable state of affairs," Smith said.
The company says its distribution agreements--with India's Cipla, among others--wouldn't be affected by Smith's departure. "We are talking to [India's Cipla] on a regular basis and they are very supportive," Chairman Sibusiso Luthuli told Bloomberg. "There is very strong management in place; this is not a one-man show."