Official statement regarding the alleged purchase transactions entered into between Aspen and Frankel Chemicals

17/06/09:

OFFICIAL STATEMENT REGARDING THE ALLEGED PURCHASE TRANSACTIONS ENTERED INTO BETWEEN ASPEN AND FRANKEL CHEMICALS FOR THE PURCHASE BY ASPEN FROM FRANKEL CHEMICALS OF RAW MATERIALS FOR THE MANUFACTURE OF ANTI-RETROVIALS.

ASPEN PHARMACARE HOLDINGS LIMITED AND ITS AFFILIATES (“Aspen”) AND FRANKEL CHEMICALS (“Frankel”)

It has come to the attention of Aspen that information allegedly pertaining to the business relationship between Frankel and Aspen has been provided to the international investment community and the general public. Aspen hereby wishes to clarify that the alleged purchases and related amounts owing are invalid and have arisen as a result of the falsification of documents.

The allegations are currently sub-judicae. Aspen will co-operate, without restriction, with all statutory investigating authorities and comply with all legal requirements relating to this matter.

Frankel have alleged that:

(i) “Over the past five years, Frankel Chemicals has been awarded the contract to procure Anti-Retroviral (“ARV”) ingredients for Aspen Pharmaceuticals Ltd in South Africa to combat the spread of HIV/AIDS. The contract was awarded based on the good merits and relations Frankel has with this customer”*

(ii) Aspen is indebted to Frankel in the amount of R700 million;

(iii) Mr Stephen Saad, the Chief Executive Officer of Aspen, has verbally confirmed “payment terms” with Frankel for the payment of the aforesaid sum of R700 million.

Aspen hereby confirms the following facts:

(i) Aspen currently purchases selected raw materials directly from Frankel;

(ii) Whilst Frankel is listed as an agent of Aspen for the supply of certain other chemicals, Aspen deals directly with the suppliers thereof on a direct indent basis;

(iii) Aspen has transacted with Frankel and Frankel International, but has not undertaken business with any of the following entities (which purportedly form part of the Frankel Group), namely:

  • Eurochemicals Pty Ltd
  • Frankel SA
  • Frankel Enterprises
  • Frankel Asset Management
  • Abated Investments; and
  • Bartan Group (Australia).

(iv) As at the date of this letter there are no monies due to or owing to Frankel or payable by Aspen to Frankel, or any of its affiliates, for the alleged purchases of ARV materials.

(v) Aspen purchases all of its Active Pharmaceutical Ingredients, which are used for the manufacture of ARV products, from other third party suppliers.

(vi) Aspen is aware of the existence of documents representing to be purchase orders and other correspondence between Aspen and Frankel which were neither prepared nor authorized by Aspen. These documents have been fraudulently prepared using forged purchase order templates and forged signatures, representing Aspen personnel.

Should you have specific queries on this matter, please contact Mr. Pieter van der Sandt, Legal Counsel for Aspen on (011) 239 6522.