Judge Clears Obstacle From Khan’s Bid to Control ICN : Corporations: Investor is found to have disclosed enough for stockholders to decide whether to support him or chairman Panic.

A federal judge in New York cleared a roadblock Tuesday that had barred controversial investor Rafi Khan, a onetime broker, from mounting a fight for control of ICN Pharmaceuticals Inc.

U.S. District Judge John Sprizzo ruled that Khan had disclosed enough about his own legal entanglements to let shareholders decide whether to vote for him and his slate of directors at the Costa Mesa company’s annual meeting, which was postponed last spring and has yet to be rescheduled.

But Sprizzo said Khan first must correct previous disclosures that no longer apply--such as changes in the proposed slate of directors--and must obtain clearance from the Securities and Exchange Commission.

Khan’s lawyer, Joseph Ferraro, said Khan will update SEC filings and obtain SEC approval before distributing materials to shareholders.

Khan, who traded ICN stock for a Los Angeles brokerage earlier this year, has acquired 1% of the pharmaceuticals company’s stock and wants to oust the current board and its founding chairman, Milan Panic.

Though the judge rejected ICN’s attempt to block Khan’s efforts, the company said it probably will challenge any amended disclosure statement that Khan files.

Under SEC laws, those seeking shareholder votes for directorships must disclose all relevant and material information about themselves so that shareholders can make informed decisions.

“We’re very confident that no reasonable shareholders will support an individual who’s been found to have lied under oath, to have engaged in insider trading, to have gone through a revolving door of employment--not to mention the fact that he has absolutely no experience in operating a pharmaceutical company,” said Jack Sholl, ICN’s senior vice president.

During the long and tumultuous battle, Sprizzo had temporarily halted Khan’s effort to solicit votes, saying that Khan had lied on the witness stand and had engaged in insider trading.

The judge has been presiding over a lawsuit that ICN filed against Khan in April that accuses the former broker of trading ICN stock on inside information, breaching duties to the company and other shareholders, and inflating the price of the company’s stock so he could make a profit.

Khan had been a shareholder and director of RKS Financial Group Inc. in Beverly Hills since March and worked at the company’s subsidiary, brokerage Reynolds Kenrick & Stratton, but quit suddenly about two weeks ago. Since then, attempts to reach him for comment have been unsuccessful.

His run at ICN began at his previous job as a broker for H.J. Meyers & Co. in Beverly Hills.

He and other disgruntled shareholders objected to the management style and high salary of Panic, who interrupted his operation of the company for about six months last year to act as Yugoslavia’s prime minister.