BUSINESSMAN Farooq Khan’s plans to boost the capital of Rivkin Financial Services and sell off its Avcol stockbroking business have been stalled by the Takeovers Panel.
The panel made a declaration of unacceptable circumstances in relation to the rights issue including that it could greatly influence the battle for control.
The one-for-three pro rata renounceable rights issue announced by RFS earlier this year was to be fully underwritten by Westchester Financial Services and fully sub-underwritten by Central Exchange Limited.
Westchester Financial Services is controlled by Christopher Ryan and Central Exchange is a company linked to Mr Khan.
The panel also said there was "no immediate or compelling need" for the rights issue.
RFS has made several undertakings to the panel including that it would not make any rights offer for three months if the offer might result in Central Exchange Limited, Fast Scout, Sofcom, Altera Capital, Westchester Financial Services or any of their officers, related parties or associates boosting their collective interest in RFS shares pursuant to any underwriting or sub underwriting arrangement.
The panel accepted the RFS undertakings as a remedy for its unacceptable circumstances findings.
Major RFS shareholder IWL, which owns online broker Sanford has called an extraordinary general meeting for February 22 to remove Mr Khan’s team from the RFS board.
The IWL play is backed by outdoor media company Network Limited.
Network chairman Graham Jones said his company had become interested in RFS because it was a cash box and would give his company access to investment funds.
Mr Khan won control of RFS last year after a tight and bitter battle.
He has said he wants to turn RFS into an investment group, as he had done with other companies such as Central Exchange and Bentley International Limited.
Central Exchange received a $19 million boost from Minara Resources about one year ago due to a complex tenment settlement.