The Australian government has agreed to pay Pan Pharmaceuticals founder Jim Selim $A55 million in damages, after the company collapsed following a recall of its medicines.
The Therapeutic Goods Administration recalled Pan's products in April 2003, when it found the company's manufacturing procedures had created an immediate risk of death or injury.
The TGA began an investigation after several people complained they had experienced severe hallucinations after taking Pan's travel sickness drug, Travacalm.
The ABC reports the audit cost the company its licence and led to the biggest drug recall in Australia's history.
Mr Selim, who was the chief of Pan and its major shareholder, sued the administration for $A200 million, the company's value when it collapsed.
He accused it of neglience, claiming it pursued a vendetta against him.
In Sydney on Thursday, the Federal Court revealed the Commonwealth had agreed to a $A50 million payment. It has also agreed to pay $A5 million in legal costs within 28 days.
Mr Selim says he is still seeking an inquiry and a formal apology for what he calls the TGA's deliberate abuse of its power.
Vindication claimed
Lawyer Andrew Thorpe says his client has been vindicated by the "landmark" case.
He says the TGA's "wrongful destruction" of Mr Selim's business caused $A750 million worth of damage to the Australian community.
He says 300 jobs were lost and $A350 million was wiped off the stock exchange.
The ABC reports Mr Selim was last year found not guilty of trying to destroy computer records about Travacalm while the company was being audited.
