Khan pushes on with Biota board bid

The largest shareholder in drug developer Biota Holdings, Perth entrepreneur Farooq Khan, is renewing his bid to force his way onto its board by calling for a March 28 general meeting in Melbourne.

Besides proposing himself for a seat on the six-member board, Khan plans to ask shareholders at the meeting to shrink the total annual salary of non-executive directors to $AUD175,000 from the current allowed maximum of $AUD400,000. According to Biota's annual report, non-executive directors were paid $284,898 in 2002.

He will also move for a bonus issue of options valued at 46 cents each, slightly above Biota's current market price, and exercisable in 2005 on the basis of one option for every two shares held. If all options were taken up, the move would raise more than $17 million for Biota.

In addition, Khan intends to call on shareholders to agree to a strategic re-appraisal of the company by Deloitte Corporate Finance.

The moves highlight Khan's contention that the drug developer has failed to maintain value for shareholders since it since it peaked at $9.10 a share in 1999.

Through his listed company Bigshop.com.au, Khan controls 9.5 per cent of Biota, a stake he says represents an investment of $3.5 million.

Biota's management has responded to Khan's notice of a general meeting by advising shareholders to take no action relating to it.

The company has "serious questions about the validity of the notice overall as well as some of the resolutions proposed," according to company secretary Andrew Macdonald.

Late last year Khan launched a short-lived and unsuccessful attempt at a scrip-based hostile takeover of Biota, and its board extended no concessions to Khan at the biotech's subsequent November 1 2002 annual general meeting. It has characterised Khan as a corporate raider attracted by Biota's $30 million cashbox and dismissed his analysis of the company's performance as flawed.