10/09/2009 - 00:00

Proxies deemed invalid as Khan tightens grip

10/09/2009 - 00:00

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THE sister of Perth investor Farooq Khan has emerged as a substantial shareholder in investment firm Bentley Capital, as agitators that sought his removal from the board disperse.

THE sister of Perth investor Farooq Khan has emerged as a substantial shareholder in investment firm Bentley Capital, as agitators that sought his removal from the board disperse.

Ambreen Chaudhri has spent more than $2 million purchasing shares in the company, taking the combined pair's control of Bentley to more than 35 per cent.

Ms Chaudhri started buying shares the day after Bentley announced to the market shareholders had requisitioned a meeting to effectively wind up the investment company.

The shareholders that tried to oust Mr Khan and fellow director William Johnson last month - a strategy used after it was deemed invalid to wind up the company by a requisitioned meeting - have since sold down their stakes, making it unlikely another bid for his removal will be made in the near term.

"We're done now," one shareholder said.

It is understood that a large number of proxies lodged by the principal agitator, Melbourne-based Michael Barnett, were deemed invalid, and a question mark remains over proxies cast by at least one other stakeholder.

Mr Khan gained his reputation as a corporate raider in the dot.com days after establishing a record of targeting troubled companies with substantial cash reserves, including a bitter and ultimately unsuccessful tilt at biotech company Biota.

By tracking the interests of the public companies Mr Khan is a director at, WA Business News believes his power stems from an investment in a highly illiquid failed dot.com turned holding company, Queste Communications, where he is the managing director and a major shareholder.

Azhar Chaudhri, who is the husband of Ambreen and therefore Mr Khan's brother-in-law, is a director and the third largest shareholder at Queste.

Mr Khan has secured directorships at several linked firms - including Bentley and Strike Resources - which are ultimately controlled or influenced by Queste-controlled Orion Equities. His directorships earn Mr Khan an annual base salary of more than $900,000, according to annual reports.

Proxies lodged by Mr Barnett through his company Island Arch are understood to have been deemed invalid because the company has been deregistered.

ASIC records the company applied to be deregistered in early June.

Mr Barnett, who has sold about one million shares since the meeting, has run foul of the corporate regulator in the past over an unsolicited share offer, however the deregistration appears to be a company decision.

Sydney-based fund manager Geoff Wilson voted to remove the Bentley directors, but has since sold off his entire holding.

Dissident shareholders were largely concerned with the management of Bentley, with suggestions management took fees but didn't do enough in return; a claim Mr Khan firmly rejects.

Bentley was seen as the weakest part of Mr Khan's network of influence, and the best avenue in which to launch a bid for his removal.

There is also a question over proxies linked to Bentley director Peter Simpson.

In July, an ASX announcement indicated Mr Simpson would use almost 9 million shares to vote alongside Mr Khan, which would effectively quash the dissident shareholders.

Mr Khan did not ultimately secure enough votes to indicate Mr Simpson sided with him. It is understood Mr Simpson intended to vote the bulk of his proxies to oust Messrs Khan and Johnson.

Efforts to reach Mr Simpson for comment were unsuccessful.

Mr Khan's legal counsel Martin Bennett said that Bentley would not discuss internal management affairs.

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