MINOR skirmishes targeting Perth corporate raider Farooq Khan during the past three months are escalating into a major offensive aimed at the heart of his power base.
MINOR skirmishes targeting Perth corporate raider Farooq Khan during the past three months are escalating into a major offensive aimed at the heart of his power base.
The threat comes from two Perth businessmen who are up for election as directors of the holding company Mr Khan uses to wield influence over a handful of other listed entities.
If Mr Khan loses control of failed dot.com turned holding company, Queste Communications, his influence and near million-dollar base salary generated through board positions at the linked companies could conceivably come to an end.
Andrew Moffat, a former mergers and acquisitions specialist at BNP Paribas Australia, said he wanted to introduce some independence onto the board.
“He told me he [Mr Khan] controls the register,” said Mr Moffat, who is seeking a position on the Queste board.
“I want to test that.”
Mr Khan, his brother and his brother-in-law are all on the Queste board.
Mr Khan told WA Business News he had never claimed to control Queste.
“For someone who doesn’t like the structure why does he continue to buy shares in Queste?” Mr Khan said, referring to Mr Moffat.
Perth-based insolvency practitioner Antony Woodings is also up for election at the upcoming annual general meeting, alongside Mr Moffat.
Mr Khan is a lawyer who gained his reputation as a corporate raider in the dot.com years after getting involved in battles to take control of troubled companies with substantial cash reserves.
WA Business News understands Mr Khan has since elevated himself onto a series of public company boards through an investment – currently worth about $750,000 – in the rarely traded Queste where he is the managing director.
Mr Khan holds executive roles at what are effectively subsidiaries, Orion Equities and Bentley Capital. He is an executive at Alara Resources and is moving from an executive to a non-executive role at Strike Resources.
Mr Khan said he retained his positions because of what he brought to the table.
“I think the companies get a bargain from what they get from me,” he said.
But there have been some skirmishes of late involving Mr Khan’s network by discontented shareholders.
A recent attempt to oust him from his board position at listed investment company Bentley Capital came unstuck when the proxies of the primary agitator were rightly deemed invalid.
Mr Moffat said three companies in the network he was interested in – Queste, Orion and Bentley – hadn’t exactly shone during the past five years.
“Earlier this month I wrote to the board of Queste and amongst other things noted that the share prices of all three companies were below what they were five years ago,” Mr Moffat said.
Mr Moffat, who bought into Queste six years ago attracted by the discount to net tangible assets, is also seeking to become a director at Bentley.
Mr Khan said the companies were paying regular dividends until the financial crisis hit, and that the management had preserved cash and created value during the time in question.
He said Mr Moffat needed to get his own house in order first as the chairman of Pacific Star Network and non-executive director at Rubik Financial; both of which have suffered share price woes.
“He really needs to concentrate on getting those companies out of the doldrums before looking at other companies,” Mr Khan said.
Queste’s largest shareholder, Bell IXL Investments, will no doubt have a say in the success or failure of the tilt. Bell’s Massimo Cellante is known as a raider of sorts in his own right who targets cashed up companies with deeply discounted share prices.
The Queste register, complete with family and Mr Khan’s own substantial stake, is a formidable obstacle for Messrs Moffat and Woodings to overcome in their bid for directorships.
They have taken the less confrontational approach of vying for directorships, without a resolution to oust the current directors.
