Cipla Medpro's chief executive quits, shares rise

JOHANNESBURG (Reuters) - South Africa's Cipla Medpro said on Monday its chief executive had stepped down and he planned to take legal action against the company he founded, ending months of speculation about his future at the drug maker.

Cipla Medpro, which has a tie-up with India's Cipla Ltd, said Chief Executive Jerome Smith stepped down late on Friday "on the basis of an irretrievable breakdown in the working relationship with the board and alleging he was forced to resign".

South Africa's third-largest pharmaceutical firm suspended Smith in August pending an investigation into "serious allegations" that it had previously declined to identify.

It said on Monday the suspension was based on more than 20 charges against Smith including potential "gross misconduct" and "dishonesty" for approving bonuses and pay rises for himself that were not recommended by the board.

The charges also allege Smith may have taken loans or other financial assistance from the company without proper approval, and had 45 people on the company's books who were not actual employees and were paid on his behalf.

The company said Smith planned legal action against it, which it planned to defend.

Shares of Cipla Medpro were up 4 percent on the news.

(Reporting by David Dolan)