BigShop loses bid for Biota board

A bid by Perth entrepreneur Farooq Khan to win a seat on the board of Biota Holdings was defeated by other shareholders at a heated meeting in Melbourne this afternoon.

Khan, whose listed shell company BigShop.com.au owns 10 per cent of Biota, called today's extraordinary general meeting to ask shareholders to vote on five resolutions, including the appointment of himself to Biota's board, reduction of the total remuneration available to board members to $AUD175,000 from its current cap of $AUD400,000, a bonus issue of options, and a plan for a strategic review of the company, citing Biota's steepening losses and dwindling cash reserves as of major concern to shareholders.

However, Biota refused to accept all of the resolutions as valid and while allowing the meeting to go ahead as planned, removed the resolutions regarding the options and the strategic review from consideration, leaving the board appointment and the issue of remuneration as the only two resolutions to be considered by shareholders.

Further confusing the issue was the number of proxy forms sent to shareholders, as BigShop supplied several different versions, and Biota sent out its own. Biota said that BigShop's proxy forms were of questionable legality as they directed all open votes to BigShop and were supplied with a reply-paid envelope to BigShop's share registry rather than Biota's.

Biota chairman John Grant said it was significant that Khan was only able to persuade 6 per cent of Biota's shareholders to give him a seat on the board.

"It was a resounding rejection by Biota shareholders of Mr Khan and his suitability for joining the board of a broadly-based publicly listed biotech like Biota," Grant said.

Grant said he believed Khan's mere presence on the Biota board would be destructive to the company and to the interests of shareholders generally.

Khan said afterwards he was disappointed that even though he had called the meeting, he had been unable to address shareholder concerns as he was "gagged" by the board during the meeting. At one stage Grant had threatened to eject Khan from the meeting.

Khan said he had not admitted defeat and had serious questions about the handling of proxy votes, but had not yet decided whether to challenge the result.

But Biota pre-empted BigShop's call for a poll of the proxy votes by requesting it themselves. Official results are likely to be released to the ASX on Monday.

BigShop will bear the costs of today's meeting, and Grant said after the meeting that Biota would be seeking reimbursement for the "substantial expenses" incurred by the company.