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Goldshield chiefs arrested in inquiry

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Two senior executives of Goldshield Group, one of the drugs companies at the centre of a price-fixing investigation, were arrested last week, it emerged yesterday.

Two senior executives of Goldshield Group, one of the drugs companies at the centre of a price-fixing investigation, were arrested last week, it emerged yesterday.

Ajit Patel, the chief executive, and Kirti Patel, the chief operating officer, were interviewed by the Metropolitan Police as part of the inquiry conducted by the Serious Fraud Office.

A spokesman for the SFO confirmed that the two men had come in for a pre-arranged interview and had been arrested under standard procedure when police wish to question people as part of an investigation. They were released on police bail.

The move came three years after the Department of Health called in the SFO, alleging that six companies had colluded to limit the supply and inflate the prices of popular generic medicines, where patents no longer apply and whichshould, therefore, be subject to competitive market forces.

In April 2002 more than 200 police officers raided 11 homes and 16 business addresses, including Ajit Patel's house and Goldshield's south London offices, seizing files and computer equipment.

The other businesses raided were Regent-GM Laboratories; Norton Healthcare, a subsidiary of the US-based Ivax Corporation; Generics UK, part of the German drugs group Merck; and a UK subsidiary of Ranbaxy Laboratories of India. All the companies deny any illegal activity.

The Patels have consistently denied they acted in an unlawful or improper manner, and alerted the City in January that they might be interviewed between April and June. A Goldshield spokesman said: "The company is co-operating fully with the SFO in their investigation, and we are confident of a successful outcome."

The raids triggered a fall of one-third in Goldshield's share price. They closed at 278.5p on Thursday, compared with about 530p before news of the inquiry broke.

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