Biota rejects Bigshop board demand

A bid by Perth lawyer and financier Farooq Khan to force his way onto the board of Biota Holdings has been rejected by the drug discovery company.

Khan, whose stake in Biota Holdings through listed company Bigshop.com.au, is now at 9.232 per cent, demanded two board seats at a meeting with Biota directors last week.

He asked the seats be allotted to himself and an associate, Victor Ho, as representatives of Bigshop. Khan also sought the right by Bigshop to take up a private placement of Biota shares.

The request for board positions was rejected because Khan failed to provide information about his intentions in relation to Biota, said chairman John Grant.

The board is concerned that Khan intends to use the board appointments to push for alterations in Biota's directions which could involve using its estimated $20 million worth of cash assets purposes other than biopharmaceutical research and development.

Khan has asserted such details are already on the public record, a statement which the board does not agree with, according to Grant.

In an earlier interview with Australian Biotechnology News, Khan denied any asset-stripping intentions with regard to Biota. "We see Biota has some valuable assets that we think are worth a lot more than what the market says," he said. "We want to join the board in order to increase the value of those assets."

Grant said Khan also failed to disclose any information about the skills of the two nominees related to biotechnology or pharmaceutical experience.

Khan has said he will requisition a meeting of shareholders to vote on the board representation issue if his request for seats was turned down by directors.

Biota's annual general meeting is scheduled for Nov 1.