RAFI KHAN WAS THE "top broker" AT H.J. MEYERS
Mr. Khan resigned two weeks ago from a Beverly Hills, Calif.
brokerage firm, H. J. Meyers & Co., over a dispute that involved ICN and Mr. Panic. Mr. Khan claims he was the firm's "top broker" and is still on good terms with its owner, Bud Meyers. H. J. Meyers recently underwrote a securities offering for Viratek Inc., a publicly traded
subsidiary of ICN.
Subject: Panic, Back at ICN Pharmaceuticals, Now Is Facing a Fight to Keep His Job
Date: Published: 4/2/93 (86 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.
Who's News:
Panic, Back at ICN Pharmaceuticals,
Now Is Facing a Fight to Keep His Job
----
By Rhonda L. Rundle
Staff Reporter of The Wall Street Journal
Milan Panic, the Serbian emigre whose stint as prime minister of
Yugoslavia ended abruptly, now faces a fight to keep his job at ICN
Pharmaceuticals Inc.
A California stockbroker, whose clients include some of ICN's
biggest shareholders, filed a proposal with the Securities and
Exchange Commission yesterday to oust Mr. Panic, who returned as
ICN's chairman and chief executive officer last month. The broker,
Rafi M. Khan, wants to install an entirely new board, including
himself, at the Costa Mesa, Calif., drug maker.
The filing is a consent solicitation, which is similar to a proxy
fight but is generally less costly and doesn't require a shareholder
meeting. Removal of the board requires approval by holders of a
majority of ICN's total shares outstanding.
"There should be a change in management ...because of the
operating performance ...the cumulative return to the
stockholders in comparison to other companies" and excessive
compensation to Mr. Panic, the filing said. Mr. Khan owns 120,000
ICN shares, or less than 1% of the shares outstanding.
Mr. Panic received total cash compensation of $768,681 in 1991,
and a bonus valued at $5.4 million when it was awarded in April
1992. "This bonus was paid in a year which saw the price of the
company's stock" sink to $6.50 a share from $20.375 a share, the
filing said.
Mr. Khan resigned two weeks ago from a Beverly Hills, Calif.
brokerage firm, H. J. Meyers & Co., over a dispute that involved ICN
and Mr. Panic. Mr. Khan claims he was the firm's "top broker" and is
still on good terms with its owner, Bud Meyers. H. J. Meyers recently
underwrote a securities offering for Viratek Inc., a publicly traded
subsidiary of ICN. Mr. Meyers didn't return a call yesterday but
confirmed through a spokeswoman that Mr. Khan left voluntarily.
ICN officials said they hadn't seen the filing, but after it was
described to them, the officials issued a statement saying: "We are
shocked that someone who recently participated in an underwriting
for one of the company's subsidiaries would take an action of this
sort.... Khan has acted irresponsibly for someone in a fiduciary
capacity. We intend to prove this in court and to demand an
immediate SEC investigation of his activities."
Mr. Khan said he "absolutely denied any wrongdoing." Mr. Panic
wasn't available.
Mr. Khan said in an interview that he is counting on support from
"virtually all of ICN's institutional investors," many of whom
bought the stock based on hopes for ICN's ribavirin, an antiviral
drug. "I would be shocked if the top 20 institutional investors
didn't all support this," said Mr. Khan, who has joined the Beverly
Hills firm of Reynolds Kendrick Stratton Inc. Those investors are
believed to hold as much as half of ICN's shares.
John Kaweske, executive vice president of Invesco Trust Co.,
declined to say directly how he will vote. But he said Invesco's
investment "was made a few months ago predicated on the idea ...
that there had been a change in management when Panic became prime
minister and gave up his corporate responsibilities." Invesco is one
of ICN's largest shareholders, with 1.3 million shares, or a 9%
stake.
In addition, the investment reflects "our belief that ribavirin
will become a much larger-selling drug than it currently is" because
of promising independent test results showing its effectiveness in
treating Hepatitis C, Mr. Kaweske said. The disease, which can
destroy the liver, is a growing health problem in the U. S. and
around the world.
Ribavirin is ICN's only proprietary drug and is sold largely
overseas. The U. S. Food and Drug Administration has approved the
drug in aerosol form against a lung ailment in infants. Mr. Panic's
attempts in the 1980s to promote ribavirin for other diseases,
including AIDS, got him into trouble with the FDA and the SEC.
The 63-year-old Mr. Panic was reinstated last month in all his
corporate posts at ICN and its four publicly traded subsidiaries
after an eight-month leave of absence to serve as Yugoslavia's prime
minister. Mr. Panic returned to California after failing to defeat
Serbian President Slobodan Milosevic in an election campaign in
December.
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