A chief executive who has been charged with trying to defraud the National Health Service is leading a £140 million management buyout of Goldshield Group, the drug development and healthcare company.

Shares in Goldshield rose sharply after the company said that it was in talks with Ajit Patel, the chief executive, about a proposed buyout. They were up 14.7 per cent to 337p, valuing the group at £125 million.

A spokesman for Goldshield, which is being advised by Panmure Gordon, said that discussions about the buyout were at an early stage and declined further comment.

In April the company said that Mr Patel and Kirti Patel, the chief operating officer, had been charged by the Serious Fraud Office (SFO)over an alleged conspiracy to defraud the NHS by fixing drug prices. The two men are yet to face trial and deny the charges.

The Department of Health called in the SFO in 2002, amid claims that six companies had colluded during the late 1990s to limit the supply of penicillin-based antibiotics and the blood-thinning drug warfarin in order to lift prices.

In April 2002, more than 200 officers raided 11 homes and 16 addresses — including Mr Patel’s house and Goldshield’s offices in Croydon — in connection with the investigation. They seized files and computer equipment.

The Patels were later charged alongside seven other men from four other companies.

Goldshield was founded in 1991 as a developer of generic drugs. It listed on the London Stock Exchange in 1998 and has since expanded into the Indian healthcare sector. The group plans to open nursing homes there, with the first of these scheduled to open soon in Bombay.

One City analyst expressed concern about Goldshield’s management approach. “The company has the feel of a family company that just happens to be quoted,” she said. “There is not a lot of management discipline.”

She said that the company had conducted little research before embarking on its Indian venture, which she described as “extremely risky”.

In June Goldshield reported profits up 51 per cent to £6.8 million, despite legal costs of £1.6 million related to the investigation.

In May the company appointed Keith Hellawell, the former chief constable and UK drugs co-ordinator, as chairman-designate.

Goldshield sells prescription and non-prescription medicines, vitamins, minerals and supplements as well as a range of other healthcare products.

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