The UK competition regulator is seeking to legally disqualify directors from four companies, including the chief executive of Alliance Pharma (LON:ALAPH) PLC (AIM:APH).
Alliance's Peter Butterfield is one of seven directors from four companies against which the Competition and Markets Authority (CMA) said it intends to seek a competition disqualification order (CDO) over suspected anti-competitive agreements sold to the NHS.
The CMA today said it will issue proceedings in the High Court seeking the disqualification of the directors, also including Alliance director John Dawson, and executives from Lexon UK Holdings, Focus Pharmaceuticals and Medreich PLC.
These legal proceedings arise from the CMA’s earlier decision that for five years up to July 2018, Alliance, Focus (now owned by Advanz, previously owned by the private equity firm Cinven), and Lexon were "involved in an arrangement that had the object of restricting competition in the supply of prochlorperazine 3mg dissolvable or 'buccal' prescription-only medicine to the NHS".
Medreich is said to have been involved in the arrangement for four years, up to February 2018.
Lexon, Alliance, Cinven, and Advanz have each filed an appeal in the Competition Appeal Tribunal (CAT) against the CMA’s decision and the £35mln of fines imposed.
The CMA proceedings are in line with the regulator's stated policy to consider CDOs in all cases where an infringement has been found, Aliance noted in a statement, adding that it was still "very disappointed".
CDOs will only be heard by the High Court if the tribunal upholds the CMA's findings, with the date of the CAT appeal expected to take place sometime around May or June next year.
"Alliance fundamentally disagrees with the CMA's actions, both in relation to the findings against the company and in applying for a CDO against Mr Butterfield," the London-listed company said.
"Alliance reiterates that it did not participate in, or profit from, any market sharing arrangement and refutes any involvement by the company or Mr Butterfield, who retains the full confidence and support of the board as CEO, continuing to lead the business to deliver the long-term strategy of the group."
David Cook, chair of Alliance Pharma, said: "The board disagrees and is disappointed with the CMA's actions against Peter. Peter has been on the board since 2010, and was appointed CEO in May 2018. He has been instrumental in helping Alliance to deliver on its growth plans and successfully drive the business forward. He has our full support."
The CMA has had a busy week: on Friday it cleared the takeover of Avast by NortonLifelock, and yesterday it raised concerns about Microsoft (NASDAQ:MSFT)'s takeover of Activision Blizzard (NASDAQ:ATVI).