Broker Seeks to Oust Chief of ICN Pharmaceuticals
A stockbroker who once touted ICN Pharmaceuticals Inc. is now trying to depose Chairman Milan Panic, whose last job was prime minister of Yugoslavia.
Broker Rafi M. Khan told the Securities and Exchange Commission this week that he will try to replace all eight ICN directors--including Panic--in the next few months through something called a consent solicitation.
Unlike a proxy fight, a consent solicitation doesn’t require shareholders to hold a meeting before a majority of them may vote directors out.
Khan said in his SEC filing that while Panic collected nearly $6.2 million in salary and bonuses for 1991, the company’s stock fell last year from more than $20 a share to $6.50.
That much pay “is excessive in light of the company’s operating performance and total cumulative return to stockholders,” Khan said in the filing, “and is not in the best interest” of shareholders.
Another big shareholder also had unusually harsh words for Panic on Friday.
“His judgment in running the business has been impeccably bad,” said Seth M. Glickenhaus, senior partner at Glickenhaus & Co. in New York. The investment firm and its customers hold 500,000 ICN shares, or about 3% of the 16 million outstanding.
“He’s milked the company; he has a cavalier indifference to shareholders,” Glickenhaus said. “And he’s grossly overpaid.” Glickenhaus said he hasn’t talked to other big investors in ICN. But, he said, “I sense a number of them feel the same way. I think Panic is going to be put out to pasture.”
ICN immediately accused Khan of impropriety in his job as a broker for H. J. Meyers & Co., a Beverly Hills brokerage Khan left two weeks ago for another brokerage.
H. J. Meyers recently underwrote a stock offering for an ICN subsidiary. ICN said in a statement that Khan had violated federal securities regulations and his position of trust by “spreading false and misleading information about the company” during the offering.
“It is obvious to us,” the company said, “that he was soliciting shareholders (for his move to oust the board) at the time of the offering.”
Khan denied any wrongdoing.
Panic, 63, took a leave of absence last year to become prime minister of his native Yugoslavia but was ousted nine months later. He returned last month to the company he founded, dismaying some shareholders who had hoped he would retire.
ICN this week reported a 1992 loss of $65 million, or $4.67 a share. The loss was largely because of writing down the value of a Virginia drug company bought in 1989 by one of ICN’s three publicly traded subsidiaries.
Glickenhaus, the investment manager, criticized Panic for that purchase. He was also critical of the way Panic promoted the company’s drug Ribavirin--for treating viruses--as a treatment for AIDS and other ailments. Statements about the drug in the 1980s got the company in trouble with the SEC and the Food and Drug Administration.
ICN stock closed Friday at $11.75 a share, down $1.25 on the New York Stock Exchange.
