Templeton Asset Management Calls for Urgent Shareholder Action on Taro Pharmaceuticals

London, 11 December 2009 - Templeton Asset Management Ltd. ("Templeton Emerging Markets Team") today announced that it intended to vote its shares AGAINST the proposal to increase the indemnification of directors and management of Taro Pharmaceutical ("Taro") and AGAINST the re-election of the management slate of directors. Templeton Emerging Markets Team called for all Taro shareholders to take urgent action to withhold support of management and incumbent directors, reject indemnification and demand audited financial statements.

Mark Mobius, executive chairman of Templeton Asset Management, said: "The current board and management of the company have proven unwilling or unable to run the company in the interest of its shareholders; and, in our view, they do not deserve the support of Taro's shareholders. We urge shareholders to block the proposed indemnification requested by Taro’s Chairman and to demand the disclosure of audited financial accounts. After independent and dispassionate analysis, we have come to the conclusion that it is time for a replacement of the management of Taro Pharmaceuticals, which can only be introduced by a change of control. All shareholders should push for full transparency, re-listing of Taro’s shares on NASDAQ, and the introduction of a new, professional board that acts in the interest of all shareholders and releases audited accounts."

In support of this proposal, Mobius noted the following:

• Templeton Emerging Markets Team and other minority shareholders have been demanding the disclosure of Taro's audited financial accounts for over three years now. The financial reports for the years 2005-2008 as well as for the first three quarters of 2009 have not been published.
• Taro's Board has failed to provide reasonable answers as to why those accounts have not been released for such a long period of time.
• As a result of the failure to disclose the financial audit, Taro was forced to de-list its shares from NASDAQ in December 2006. Since then, shareholders are faced with severe liquidity and trading issues and are confronted with total lack of transparency.
• Shortly before the de-listing from NASDAQ, Taro shareholders were surprised to be informed about the departure of the CFO and other personnel, without ever receiving a full explanation of the company's problems and difficulties.
• Despite the recent demand of Templeton, for the auditor to be present at the shareholders meeting to update on the status of the audit, the meeting was held without the auditor present.
• Thus far this year, Taro management has spent $14.5 million of the company's money for professional and consulting fees to work on the audit, without any results. This is a very large amount of money which exceeds, by far, the regular fees paid by companies of that size. Templeton is deeply concerned about the company’s financial situation, its assets and liquidity.
• The graphs and financial data that the Chairman released in his 8 December 2009 letters were not audited and thus cannot be relied upon. As we have seen in the past, Taro had to restate un-audited financials for a number of years. Information released to shareholders has been misleading and wrong.
• For example, on 22 May 2009, Taro's management restated previously issued results for 2004 and 2005, and revised its previously announced un-audited and un-reviewed estimates of its financial results for 2006, 2007 and 2008.
• In view of these circumstances it is absurd that Taro's Chairman is attempting to obtain indemnification for board members (especially in light of the accounting and non-publication issues) without previously disclosing audited accounts. This is highly alarming and must be prevented at all costs.
• Taro's Chairman recently wrote: "....we are concerned that, if Sun seizes control of Taro, minority shareholders may fall victim to the same fate as the minority shareholders of another Sun-controlled public company." On the contrary, from our perspective as the second largest minority shareholder, Taro shareholders have undoubtedly fallen victim to Taro's scandalous mismanagement.
• We have no confidence left in the quality of the Board of Taro Pharmaceuticals in view of the failure to provide the most essential rights to shareholders.

Templeton Asset Management Ltd. is a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over $539 billion in assets under management as of 30 November 2009. For more information, please visit franklintempleton.com.uk.