ICN Sets Date for Yearly Meeting-- and Proxy Fight?

COSTA MESA — In a move that will almost certainly trigger a grueling proxy fight, ICN Pharmaceuticals Inc. said Thursday that it has set a date for its long-delayed annual stockholders meeting.

ICN spokesman Jack Sholl said the meeting, which has been put off for the past five months, is now scheduled for Dec. 15.

The company made the announcement two days after a federal judge in New York ruled that a dissident investor has the right to garner shareholder support in his effort to force out ICN’s board of directors.

Investor Rafi Khan, formerly a broker for the Costa Mesa drug firm, has vowed to unseat ICN Chairman Milan Panic, who founded the company in 1960 and gained international attention when he served as prime minister of Yugoslavia last year; and the rest of the company’s directors.

Khan, however, who owns 1% of the company’s stock, is facing problems of his own.

He is a defendant in a lawsuit by ICN in which the company accuses him of racketeering and violating his fiduciary responsibilities when he was an institutional underwriter for the company. Two weeks ago, he quit his job as a stockbroker and director at RKS Financial Group Inc. in Beverly Hills and has not been available for comment since.

ICN had put off its annual meeting, first scheduled for May 12, until it was clear whether Khan would have a legal right to seek shareholder support to oust the board.

U.S. District Judge John Sprizzo in New York ruled that Khan had lied under oath and had broken ICN’s trust when he sold stock for the firm while at brokerage H.J. Meyers & Co., also in Beverly Hills. But the judge said that Khan has disclosed enough about his own legal entanglements to let shareholders decide whether to vote for him and a slate of directors he is proposing.

The head of a St. Louis pension management company that owns stock in one of ICN’s subsidiaries said Thursday he fears that a proxy fight is inevitable and that the effect will be detrimental to ICN’s subsidiaries, SPI Pharmaceuticals Inc., ICN Biomedicals Inc. and Viratek Inc. All three are based in Costa Mesa.

“I think Panic is valuable on the board,” said Gerald Kennedy, president of Kennedy Capital Management. “I think he is an important part of the company. You can’t kick a guy like that off (the board). It would be stupid.”