Templeton Asset Management Executive Chairman Mark Mobius Sends Letter to Chairman of Taro Pharmaceuticals Urging New Management

From Templeton Asset Management Ltd.
contact Bill Weeks
Telephone (212) 632-3204

New York, December 23, 2009 – Templeton Asset Management Ltd. (“Templeton Emerging Markets Team”) today sent a letter to the Chairman of Taro Pharmaceuticals Industries Ltd. ("Taro") urging new management at the company and the completion of audited financial statements. The letter from Mark Mobius, Executive Chairman of Templeton Asset Management Ltd., to Taro Chairman Dr. Barrie Levitt appears below:

Dear Dr. Levitt:

Thank you for your letter dated December 20th.

Despite the points raised in your letter we still feel that all shareholders should do their utmost to defeat the proposals you have made.  We must ensure that there is a change in management at Taro so that the audited financial statements can be released and the company can be put on a sound footing.  We urge you and your family to exit the company peacefully and quietly so new management can take over and operate the company for the benefit of all shareholders.

With regard to your claim that you share our frustration about the missing audits, we reiterate that you have so far failed to provide a reasonable and understandable explanation about the delays and restatements of your accounts for over half a decade. You have taken a long time and spent millions of dollars but still no audit has been produced. Many larger and more complex companies, including many pharmaceutical companies around the world, are able to provide audited reports in a timely fashion. It is inconceivable that Taro cannot, after all this time and effort, release audited financial results. 

You have made many statements in the past regarding the expected time of the release of the audits, and none of them have been fulfilled. You have not done your duty as the Chairman of the board, nor have the other directors done their duties. Nowhere in the world have we ever had to wait for such a long time for the audited results of any of the companies we invest in.

Our concerns are now shared by independent advisory firms such as Proxy Governance and Glass Lewis. Glass Lewis has come to the conclusion that we fully support by stating that the board is "...unable to fulfill its responsibilities to shareholders." They have further stated that they are “.... especially concerned about the lack of disclosure regarding the audit committee."  

Contrary to your suggestion, we have by no means changed our position as shareholders of Taro. We have always tried to protect shareholders’ interests. In fact, your current criticism of Sun is a curious reversal of your own position, in the light of the very positive statements that you previously made about Sun.  This reversal casts further doubt on the ability of the board and management to capably run the company. We are confident that a change of the board would enable minority shareholders to finally receive audited results and to move the company forward in a transparent manner.

Kind regards,

S/S Mark Mobius

Executive Chairman

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 November 30, 2009. For more information, please visit www.franklintempleton.com.