Khan attacks Biota board performance, pay

The performance and pay of Biota Holdings' directors have been attacked by the drug discovery company's largest shareholder.

Perth lawyer Farooq Khan has labelled the directors' stewardship of Biota as "disastrous".

Khan, who now controls 9.2 per cent of Biota, in the last week has been rebuffed in an attempt to gain two seats on Biota's board.

He responded today with a public statement in which he criticised directors' performance as "disastrous for the share price of the company" and their remuneration as "excessive".

In total, the board's non-executive directors earned more than $280,000 in 2002, Khan claimed.

That included $90,000 for chairman John Grant and $81,000 for director Barbara Gibson, both non-executive members of the board.

Given the "disastrous performance" of Biota in terms of its dwindling share price and posted 2002 group loss of $8.57 million with similar losses expected this year, those remuneration levels were excessive, Khan said.

He also criticised what he called an absence of any significant proprietary stake in Biota by directors via shareholdings.

That claim was disputed by Grant who said all Biota's directors owned shares in the company, including himself with 200,000 and Gibson with 34,400 shares and 75,000 options.

Khan's statement revealed he has proposed to the board that management consultants Deloitte Touche Tohmatsu Corporate Finance undertake a strategic review of how the company could add shareholder value.

He suggested that Biota's profitable diagnostic division, which reportedly contributed $6.1 million of Biota's $9 million gross revenues in 2002, was an asset which could be more fully exploited.

He also suggested that the value of current regulatory approvals for Biota's Relenza anti-flu drug could be maximised and that it could be marketed as an over-the-counter product.

Khan's investment in Biota has been made through several listed companies which he controls, led by Bigshop.com.au.

In his statement, he rejected the board's bid to characterise him as a corporate raider.

He has hinted that he may attempt to take his views directly to shareholders by convening an extraordinary general meeting. However Biota's annual general meeting is already set for November 1, which would predate any EGM that could be called.