Daiichi Sankyo’s influence over affairs at Ranbaxy Laboratories is set to grow with the news that the Indian drugmaker’s chief executive Malvinder Mohan Singh has stepped down from the post with immediate effect.

Eyebrows have been raised over the announcement, especially as Mr Singh agreed to stay on as CEO for five years after the Japanese firm bought his family’s near-64% stake in the company last year for around $5 billion. He will be replaced by Atul Sobti, currently Ranbaxy's chief operating officer, while Daiichi Sankyo’s Tsutomu Une, a non-executive director of Ranbaxy, has been elected as chairman, a role that was also held by Mr Singh.

Takashi Shoda, Daiichi Sankyo’s chief executive, said that “we very much appreciate the efforts of the Singh family, which grew Ranbaxy from a small, local Indian company to the large multinational company it has become today”. He claimed that Mr Singh’s “strategic vision and passion for the pharmaceutical industry will be missed” but noted that the appointment of Mr Sobti is “providing continuity at the senior management level.”

Mr Singh said that "it was a difficult decision to separate from Ranbaxy, but it was the right time for me to do so”. He added that he leaves “with complete confidence that the initial transition phase that followed Daiichi Sankyo's acquisition of a majority shareholding interest in Ranbaxy has been completed successfully”.

Speaking at a press conference, Mr Sobti said that the change was needed for "the accelerated hybrid growth of the company and its integration with Daiichi Sankyo". He also noted that the decision was taken by the Ranbaxy board and the Japanese company was not involved.

Other observers believe that Mr Singh’s tenure at the top was coming under scrutiny seeing as how Ranbaxy has been posting quarterly losses of late, hit by currency factors and the effects of a US import ban placed on 30 of the Gurgaon-based firm’s generics.

News of Mr Singh’s departure led to a surge in Ranbaxy’s stocks and analysts welcomed the choice of Mr Sobti who before joining the firm, worked at Hero Honda, an Indian-Japanese motorcycling joint venture